Central Excise asks BJP to pay service tax on entry tickets for Modi rallies

In what could open up a pandora’s box, the Ludhiana regional unit of the Directorate General of Central Excise Intelligence has raised a red flag regarding service tax payable on entry tickets at the rallies addressed by BJP’s Prime Ministerial candidate, Narendra Modi.

The Directorate has asked the BJP’s Chandigarh office to give details of the amounts collected via entry tickets and service tax paid, if any, with regard to various rallies organised after July 1, 2012 by BJP/ Narendra Modi in the region falling under it.

In its notice, the Directorate said “As the entry ticket to event were not for any admission to entertainment event or access to amusement facilities (which are in the negative list), the same is taxable in the hands of person collecting the amount of tickets (sic).

“It appears that Bharatiya Janata Party/ Shri Narendra Modi has neither registered under service tax nor paid service tax on collection from tickets.”

The BJP, on an average, has been collecting Rs 5 - Rs 10 per person at rallies as part of its election fund raising drive.

Leader of Opposition (Rajya Sabha), Arun Jaitey, in a statement said “a legitimate question arises if such notice for collecting funds is only being issued to the BJP or to other political parties, particularly the Congress Party also.”

According to Shravan Sharma, Chartered Accountant, the notice will open a pandora’s box. Tomorrow, the Directorate could also ask people preaching in temples, mosques and churches to pay service tax on the donations they receive.

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