The Hindu Business Line : Partial response to truckers strike

New Delhi, July 2 The indefinite nationwide strike called by the All-India Motor Transport Congress (AIMTC) from Wednesday evoked “partial response” from transport bodies across the country, with trucking activities remaining normal in as many as 10 States.

The response to the agitation this time round was a pale shadow to the strikes seen in 1997 and 2004, say industry insiders, when the entire road transport trade came to a standstill on account of the service tax issue. This time round there were other demands on toll charges, diesel prices and speed governors as well.

The Government machinery worked overtime over the last few days to resolve the issues raised by the transport body. Hectic parleys continued on Wednesday between the revenue department and AIMTC on the service tax issue. Separately, the Union Minister for Shipping, Road Transport and Highways, Mr T.R. Baalu, appealed to the transporters to call off their strike.

From the revenue department side, the Central Board of Excise and Customs Member, Mr V. Sridhar, told reporters that the Finance Ministry had already sorted out a major issue on the service tax front by recently exempting supply of vehicles to Goods Transport Agency (GTA) from service tax. The other issue on show cause notices sent to GTAs was more a procedural one and could be sorted out if AIMTC were to share details of the notices with the CBEC, he said.

The Finance Ministry said it was willing to provide guidelines on how service tax law and rules should be interpreted in the case of GTAs provided they shared details with CBEC on their trade practices.

The guidelines will help them in ascertaining whether the services have to be viewed as one composite service or a multiple set of services provided through them.

The Centre collected Rs 2,833 crore service tax on GTA services during 2007-08 as compared with Rs 2,475 crore in 2006-07.

However, indications are that the revenue department may not give in to AIMTC demands that ‘cargo handling service’ and ‘storage and warehousing services’ should be part of GTA services, as recommended by a Government committee in 2004.

Responding to queries raised by AIMTC, the revenue department had in May last week clarified that recovery of the aggregate charges for these different activities (cargo handling, storage and warehousing) under a single invoice/bill/challan does not necessarily mean that all such charges constitute the “gross freight charge”.

The revenue department had said that an activity undertaken before or after transportation or an activity that can be undertaken independent of the activity of transportation (even if, in certain cases, done along with transportation, as in case of packing and transportation by movers and packers) such as storing, packing, unpacking, loading, unloading of goods before or after they are transported, would not be covered under GTA service, as these are specifically covered under other taxable services.

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