Commercial transport operation in India may come to a standstill beginning next month as the All India Motor Transport Congress (AIMTC), the nodal body for commercial transporters like truck and other heavy commercial vehicles, has given a deadline of June 30, to the government to meet their demands for the rationalisation of various duties and taxes levied on them.
AIMTC is expecting an overall increase in its per kilometer operations for trucks and other commercial vehicles from Rs 11.50 per kilometer currently, to about Rs 14 per kilometer as a result of the recent hike in diesel prices, higher toll tax, and service tax among others.
AIMTC executives claims that the transport industry will not be in a position to absorb the increased operational cost and will be forced to shut down their operations indefinitely if their demands are not addressed.
To add fuel to their problems, the Finance Ministry has send a circular to AIMTC asking for the payment of service tax arears since 2001.
AIMTC official alleged that the government is not honouring with the service tax agreement of 1997 and 2004 with the goods transport agencies.
As per the agreement service tax should be levied only on the 25 per cent of the freight rate charged by the goods transport agencies from their customer.
However the recent circular issued by the government on May 16, has placed these goods transport agencies under various other heads like courier services provider, cargo handling agencies etc where service tax are applicable on the whole charges levied from the customers.
Now the goods transport agencies are asked to pay the remaining amount since 2001, which AIMTC allege is not fair on the part of government and has demanded that the government honour the previous agreement in letter and spirit.
Charan Singh Lohara, President, AIMTC said, "We have placed several demands with the government and if they are not addressed we will be forced to shut down our operation indefinitely".