Date:27/06/2008 URL: http://www.thehindu.com/2008/06/27/stories/2008062761091200.htm

National

Truckers exempted from service tax on supply to GTAs

Special Correspondent

NEW DELHI: The government on Thursday exempted truck operators from payment of service tax on the supply of vehicles to goods transport agencies (GTAs). It came as a relief to over 25 lakh truck operators in the country and thereby averted a nationwide strike by goods transporters.

In a statement released here, the Finance Ministry said truck operators would be exempted from service tax on supply of vehicles (goods carriages) to a GTA. The decision was taken following a meeting between tax officials and representatives of All India Confederation of Goods Vehicle Owners Associations and All India Motor Transport Congress. The two bodies had threatened to go on a countrywide strike on July 2 in protest against the levy. Following a notification issued on May 16 this year, field officers of the service tax department were asking truck operators to pay the 12.5 per cent service tax.

The service tax notification was issued following an announcement in the Budget making the supply of goods carriages to GTAs liable to payment of service tax.

Hailing the decision, Indian Foundation of Transport Research and Training head S P Singh said: “Since the GTAs already pay service tax, the truck operators cannot be asked to pay that tax. The notification will clear the confusion and save the country from a nationwide strike .”