The Hindu Business Line : Truckers offer to end strike — Seek change in mode of collecting tax

`The problem is that 99 per cent of the trucking industry in the country are not organised educated class of people. Then, how are they going to comply with formalities of payment of service tax.'

New Delhi , Aug. 22

THE transporters on Sunday offered to withdraw their two-day-old indefinite strike if they are not made the "collecting agency" for service tax.

"Instead of making transporters the collecting agency, the Government can utilise the Sales Tax/Excise Department as collecting agencies by adding the 10.2 per cent service tax on to the sales tax or excise duty. In this way, the compliance will be far better," said Mr J.M. Saksena, Secretary General, All-India Motor Transport Congress.

He explained that the transporters being collecting agencies would be required to collect the service tax from manufacturer, trader or consignor and deposit the money with the Government.

So, instead of paying 10.2 per cent service tax to the transporters on the freight bill, these agencies will have to pay 10.2 per cent extra as sales tax or excise duty as the case may be.

Explaining the rationale behind the opposition to service tax or being made collecting agency for service tax, Mr Saksena stated: "The problem is that 99 per cent of the trucking industry in the country are not organised educated class of people. Then, how are they going to comply with formalities of payment of service tax," he asked.

Moreover, unlike many other service providers, truckers do not have any fixed place of business. Today, I carry cargo to Kochi, from there I might go to Kolkata or Assam. So, each time, a trucker makes a freight bill, he has to recover the service tax and deposit it at different places. "This is where the small uneducated, un-organised truckers are facing problem," he said.

In the past, the Government had recognised this problem by exempting truckers who owned up to 10 trucks (constituting about 98 per cent of the total trucking population in the country) from filing their income-tax returns. Their income is assessed at the rate of Rs 3,500 per truck per month or Rs 42,000 per truck per annum.

"On the other hand it has imposed service tax where the owners have to comply with a lot of formalities," he noted.

The AIMTC says that its main grievance was against the mode of collection of service tax. "We are not against service tax. But, the mode of collection has to be changed in such a manner that the levy should not be collected from the transport operators," Mr Saksena stated.

Still, the AIMTC maintained that there would be no compromise on its demand for withdrawal of service tax on transporters/truck owners, status quo on TDS and revoking the order to scrap eight year-old vehicles.

The AIMTC has also said that it would, henceforth, meet only the Finance Minister or the Finance Secretary for discussions.