The Hindu Business Line : Truckers call off week-long strike — Joint panel to look into service tax issue

As per the agreement, the Government will make suitable rules/notifications and define "commercial concern" and "consignment note" to clarify that truck owners and operators need not pay or collect service tax.

New Delhi , Aug. 28

THE All-India Motor Transport Congress (AIMTC) on Saturday called off its seven-day strike after finalising an agreement with the Government on the contentious issue of service tax and the various demands including tax deducted at source (TDS), scrapping of old vehicles, third-party insurance and tolls on highways.

"A joint committee comprising representatives from the transport industry and the Government would look into the issue of service tax," the AIMTC President, Mr B.S. Dhumal, told reporters while announcing the decision to end the stir which began on August 21.

The Revenue Secretary, Ms Vineeta Rai, reiterated the Government's stand that the service tax on goods transport agency will not fall on truck owners and operators.

The decision to withdraw the strike was reached after a marathon meeting lasting over nine hours, which started on Friday night and spilled into the early hours of Saturday. The Ministries of Finance and Road Transport & Highways signed two separate agreements with the AIMTC.

"The rules/notifications would be finalised in consultation with a committee set up for this purpose and the service tax will be levied and collected on the basis of the said rules/notifications," Ms Rai said.

The committee will also look into the appropriate mechanism/modalities for collection and payment of service tax by commercial concerns. The composition of the committee and other modalities will be firmed up in two to three days and it is expected to submit a report within two months, Ms Rai said.

The Government is expected to collect about Rs 2,000 crore in a full financial year from the booking agents but the impact of implementing the new measures will be felt after five months, she said.

Following the withdrawal of the strike, the Government will move the court to withdraw cases against those arrested under ESMA.

Taking note of the procedural problems faced by truck owners/ operators on refund of TDS, Ms Rai said, "The Income-Tax Department will take steps to simplify the problem of refund."

According to the second agreement signed between the Ministry of Road Transport & Highways and the AIMTC, the Government has agreed to examine the problems faced by the transport sector due to scrapping of eight- and 15-year-old vehicles.

The Government will request the Insurance Regulatory and Development Authority to "ensure that the insurance companies strictly follow the guidelines of IRDA issued from time to time and take suitable action against those companies violating the guidelines on third-party insurance."

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