Transporters body seeks govt intervention to ‘tide over ongoing crisis’

TE Raja Simhan Chennai | Updated on January 23, 2020

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Seeks rescheduling of EMIs, reverting to past method of presumptive income calculation

The ongoing economic slowdown has led to a crisis in the road transport sector. With decrease in freight demand, truck fleet utilisation has reduced by nearly 40 per cent on all major routes. Vehicle operators are unable to pay their equated monthly instalments (EMIs) to lenders. Some have even taken the extreme step of committing suicide, said Kultaran Singh Atwal, President, All India Motor Transport Congress (AIMTC).

“We urge both Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman to help the sector tide over the ongoing crisis by directing banks, NBFCs and financiers to reschedule the EMIs till July 31, 2020 for the transport sector,” he said in his representations to both.

Atwal’s request on EMI is one of the three critical issues faced by the road transport sector, which is the lifeline of the economy being an essential service provider. The AIMTC is the apex body of transporters (both cargo and passenger segments) representing the interests of about 1.94 crore truckers, and bus, tourist taxi and maxi cab operators. More than 20 crore people are directly and indirectly associated with this sector.

The AIMTC president has urged reversal of the amendment made to Section 44AE of the IT Act 2018 vide Finance Act 2018. The amendment was made considering the presumptive income on trucks above 12 tonnes, calculated at ₹1,000 per tonne on Gross Vehicle Weight (GVW) basis. “This is unjustifiable and breaking the back of small operators,” Atwal said.

The GVW encompasses both laden and unladen weight. A truck owner receives revenue only on the net weight of goods carried, ie, laden weight only and not GVW. Therefore, applying presumptive income to GVW is not justified. The freight rate is not cost-based but depends on market forces based on demand and supply, he said.

The amendment has led to unfair income assumption, acting as a deterrent to tax-ayers and breakdown of the transport sector, leading to enormous loss of livelihood.

“We suggest restoration of the presumptive income prior to Finance Act 2018, which is ₹7,500 per truck per month,” he added.

Atwal also urged revocation of TDS on transport sector being levied vide Finance Act 2018 to track total transactions, which does not serve any tangible purpose, as it is difficult to track millions of unaccounted deductions, nor is the deducted TDS being submitted to the government. With GST and e-Way Bill in place, every transaction is tracked digitally. This eradicates the need for TDS deduction in the road transaction sector, he said. “We request that TDS be revoked from the transport sector,” he said.

“The road transport sector is getting very restive. We have been trying hard to pacify them by giving hope of a positive outcome on their issues in the Budget. We hope that you will kindly empathise and understand the gravity of the situation,” Atwal said in his representation to Sitharaman.

Published on January 23, 2020

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