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Our Bureau

New Delhi, Jan. 5 Even as the Government partially bowed to AIMTC demands on service tax, the transporters strike is all set to enter the second day. The agitating transporters are not fully satisfied with the Finance Ministry’s relief.

“The goods transport agency (GTA) to GTA service (crossing agent) is not yet exempt from service tax. Also, the notification is issued today, what happens to past notices (2005-09)? Our demand is that GTA services should be out of the service tax net,” Mr Charan Singh Lohara of AIMTC told Business Line, adding that the strike will continue.

The Government on Monday granted service tax exemption on certain taxable services provided to GTA by their sub-contractors. Service tax was one of the key issues that had prompted the transporters’ to go on strike from Monday.

This move comes as a partial relief to GTAs, as hitherto they could not adjust the service tax component on their input services against the service tax payable on their output services, which are generally described as “GTA services”.

“Since no credit is available to GTA services, separately charging tax on these input services leads to double taxation, which would be mitigated now,” a Finance Ministry release said.

The specified services, which are generally used by GTAs during the course of transport of goods, for which the full service tax exemption has been given, are clearing and forwarding agent service, manpower recruitment or supply service, cargo handling service, storage and warehousing service, business auxiliary service, packaging activity service, business support service and supply of tangible goods service.

The tax on transportation of goods by road is on the gross amount of freight charges (after allowing abatement of 75 per cent) which includes the expenditure on these services.

The long list of AIMTC’s demands include total exemption from service tax to the road transport industry, scrapping of registration and return filing requirement in the Carriage by Road Bill 2007; reducing the diesel prices by at least Rs 10 a litre; reducing the price of tyres by at least 35 per cent; moratorium on all instalments and waiver of interest on truck finance for at least six months; not imposing toll tax for six months; and free movement of all vehicles all over India without any national/State permit and related taxes.

More Stories on : Taxation | Trade & Labour Unions | Roadways

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