Truckers up in arms over FM's service tax moves

<div class="section1"><div class="Normal"><span style="" font-family:="" arial="">AHMEDABAD: Finance minister P Chidambaram''s decision to bring transport booking agents in the service tax net has truckers up in arms.</span><br /><br /><span style="" font-family:="" arial="">The reason — the central excise department has started shooting off missives to truck operators asking them to furnish the value of services rendered during fiscal 2003-04 for the purpose of service tax on ''transport of goods by road (by a goods transport agency which issues consignment note, by whatever name called)''.</span><br /><br /><span style="" font-family:="" arial="">This inspite of FM clarifying during the budget speech that "there is no intention to levy service tax on truck owners or truck operators".Transport booking agents were among the 58 additional services brought under the service tax in Budget ''04, whereby service tax has been hiked from 8 per cent to 10 per cent and a two per cent education cess levied on it.</span><br /><br /><span style="" font-family:="" arial="">According to the All India Motor Transport Congress (AIMTC), FM''s announcements of imposing service tax on transport booking agents while exempting truck owners and truck operators from its purview were highly misleading, discriminatory towards road transport and a volte face on the 1997 agreement on service tax between Chidambaram, who was then FM, and AIMTC.</span><br /><br /><span style="" font-family:="" arial="">"Excise officials in-charge of service tax have confirmed that as and when a lorry receipt (LR) is issued, the person concerned is liable to pay service tax whether he is the owner of a goods booking company or a truck owner or a truck operator," AIMTC has said in a memorandum submitted to Prime Minister Manmohan Singh and Union minister of state for road transport T R Baalu.</span><br /><br /><span style="" font-family:="" arial="">AIMTC has contended that with nearly 80 per cent of truck owners or truck operators doing business in their own name, they would come under the purview of this tax as they issue LR. "So, how do truck owners and operators get exempted? </span><br /><span style="" font-family:="" arial="">"Cost of road transport will go up by about 30 per cent as service tax will have a cascading effect because it will be levied at each stage of transportation be it industry or agriculture, right from the raw material stage to finished goods landing up at the retailers," the AIMTC memorandum stated.</span><br /><br /><span style="" font-family:="" arial="">According to Hiten Vasant, vice-president, Akhil Gujarat Truck Transporters Association, the move would amount to killing the already heavily burdened truck transporters who have been operating on wafer thin margins thanks to cut-throat competition.</span><br /><br /><span style="" font-family:="" arial="">With parcel carrying services like railways and post offices being spared, road transport would become more expensive, thereby diverting road transport to rail. "Already, the increasing prices of diesel and freeze on freight rate for railway has skewed the share of business towards railways," truckers have argued.</span></div> </div>