Our Bureau

Mangalore, Nov. 6

THE first meeting of the trade bodies and chambers of commerce and industry from the southern States has adopted a resolution that the present non-compliance agitation against the levy of service tax on consigners and consignees for the taxable services provided by the goods transport agencies should continue till the tax is withdrawn by the Union Government.

The meeting also decided that the `trade bandh' should be reserved as a last resort.

A unanimous resolution in this regard was adopted at a meeting convened by the Kanara Chamber of Commerce and Industries (KCCI) in Mangalore on Saturday. Representatives of various trade bodies and chambers of commerce and industries from Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Goa attended the meeting.

The meeting also decided that the goods transport agencies are the actual providers of service for consideration and as such they are the assessees liable for service tax.

Speaking on the occasion, the Chairman of the KCCI Action Committee, Mr G. Vishwanath Kamath, said that the consignors and consignees of goods are not the providers of service, and they should not be made to pay service tax in this case.

Since the gross freight charges collected by the goods transport agencies from the consignors and consignees include the service tax element, any further levy of tax on them will amount to double taxation. "This is not permitted under the law," Mr Kamath said.

However, the meeting decided that there should be no objections from the consignors and consignees if the goods transport agencies collect the service tax in the consignment note and pay to the Government.

The modalities of mass agitation planned at the meeting included the formation of district-level action committees under the auspices of the respective district chamber of commerce and industry.

All the chambers of commerce and industry in the southern States were requested to send a model representation to the Union Finance Minister on the issue.

Public opinion soughtSpeaking at the meeting, Mr R. Subrahmanyan, Secretary General of the Madras Chamber of Commerce and Industry, said that there is a need to mobilise public opinion on the issue. He said that international retail giants that are planning to set up their operations in India might not accept such service tax conditions.

Mr Hasan Koya of Kerala Vyapari Vyavasayi Ekopana Samiti said that the trading community should come out with a united movement against the levy of service tax on consignors and consignees for the taxable services provided by the goods transport agencies.

Mr Balagopala Pai of the Indian Chamber of Commerce and Industry, Kerala, said that the Federation of Indian Chambers of Commerce and Industry should be asked to conduct a study on the issue and take remedial actions.

Dr A. Anjaneyulu, President of Indian Chamber of Commerce, Guntur, said that the issue should be properly represented at the Central level. For this, apex trade bodies from all the States should meet and chalk out a strategy, he added.

The President of the Federation of Karnataka Chambers of Commerce and Industry, Mr S. Babu, and the KCCI President, Mr A. Srinivasa Rao, were present at the meeting.

(This article was published in the Business Line print edition dated November 7, 2005)
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