The Hindu Business Line : Service tax: AIMTC objects to panel composition

SERVICE tax on the goods transport agencies is turning out to be highly taxing for the Government. Days after successfully neutralising the week-long transporters' strike, the Finance Ministry is once again at the receiving end with the All-India Motor Transport Congress (AIMTC) refusing to accept the composition of the 13-member committee in the current form.

The committee was constituted on September 10 to suggest a mechanism for collection and payment of service tax on goods transport agencies. It is scheduled to meet for the first time on Friday.

The AIMTC that spearheaded the transporters' strike in August alleged that the Finance Ministry has "gone back" on its commitment that those nominated in the panel from the transport industry would be only those approved by AIMTC.

Reflecting the deep divide in the transporters' community, AIMTC objected to the nomination of four persons who they claim had not supported it during the strike.

The four are Mr S.P. Singh, senior Fellow and Co-ordinator, Indian Foundation of Transport Research and Foundation; Mr B. Channa Reddy, President, Federation of Karnataka Lorry Owners' Association; Mr Navin Pal Singh Bhandari from New Delhi and Mr P. Sengodan, President, State Lorry Owners' Federation, Tamil Nadu.

"We have reservations in the presence of these persons in the committee. They are not representing our interests. AITMC will not attend any meeting of the committee until these persons are dropped from the committee. We are for early solution to the service tax issue, but the Government should not be rigid in including these four persons," AIMTC sources told Business Line.

The verbal understanding between AIMTC and the Revenue Department, according to sources, was that the committee would comprise three members from the revenue department and six from the transport industry (AIMTC nominees). But the Finance Ministry finally set up a 13-member committee.

Mr S.K. Bhardwaj, member, Central Board of Excise and Customs (CBEC), has been appointed as the Chairman of this committee. The committee has been asked to submit its report by October 26.

The move to set up a committee is the fallout of an agreement between the transport industry (AIMTC) and the revenue department on August 27. The week-long strike was withdrawn after an assurance was given to the AIMTC on August 27 that a committee would be appointed to recommend the appropriate mechanism for collection and payment of service tax on goods transport agency.

Sources said the terms of reference of the committee include recommendation of the "modalities for collection and payment of service tax on goods transport agencies with a view to ensure that truck owners or truck operators are not required to collect or pay any service tax".