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Unreasonable demands
January, 07th 2009
In its latest nation-wide strike call the last was in July the All India Motor Transport Congress has made several unreasonable demands. Yet the case for rationalising taxes , revamping logistics and modernising the policy regime for road transportation is unexceptionable. In parallel, we need e-governance and computerisation in inter-state movement of goods, to cut down on long wait periods and delays in trucking pan-India. The value-added tax regime should be extended to petro-goods, especially diesel, so that transporters can claim set-offs against taxes paid. Modern road haulage is capital-intensive and transport firms need corporate structures to avail of depreciation benefits, optimise tax planning and seek funds at attractive rates. Yet theres overwhelming emphasis on truckers mostly with only a few vehicles who may not be keen on disclosures for obvious reasons. The demand to scrap registration and return filing requirements, as per the new Carriers Act, makes no sense. Similarly illogical is the demand to slash tyre prices by more than a third, and for across-the-board moratorium on repayments along with waiver of interest on truck finance for at least six months, etc. It is reasonable though that goods transporters be exempt from service tax on the consolidated invoice, which include attendant services. The Centre did belatedly on Monday exempt service tax on activities like cargo handling and storage and warehousing for transport agencies. The call to lower diesel prices due to easier imported costs is also valid. But the demand for revision by a precise (Rs 10) amount smacks of unreasonableness, especially when retail prices were left unrevised in the midst of flaring prices of crude oil. Given the slowdown in the economy, there may also be a case for rationalising taxes and duties on tyres, and rescheduling repayments and easing interest rates on truck finance. The stimulus package announced last week has measures to boost financing for non-banking finance companies. It would be logical to proactively pass on the benefits of easier cost of funds for truck finance. The big picture needs to be kept in mind in working out long-term solutions.
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