Govt may provide service tax relief to transporters

Govt may provide service tax relief to transporters
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First Published: Wed, Jul 02 2008. 08 02 PM IST
Updated: Wed, Jul 02 2008. 08 02 PM IST
PTI
New Delhi: Tax authorities have said they are considering providing relief to transporters on service tax, one of the issues against which the truckers went on strike from today.
“We are ready to consider the demand of goods transport agencies (GTAs) for enhancing the abatement rate from the present level of 75 per cent,” Central Board of Excise and Customs member (CBEC) V Sridhar told reporters here.
Abatement rate is deducted from the total billing amount of service provider to arrive at tax liability.
CBEC is expected to meet with the representatives of the industry later in the day, and the issue could be handed over to a committee before taking a final decision.
He said the truck owners, who provide trucks to goods transport agencies (GTAs) on rent, have already been fully exempted from payment of service tax.
At present, the GTAs have to pay 12.36% service tax, including cess on the 25% billing amount provided they do not take any credit on payment of tax on inputs.
Sridhar said there is a case to revisit abatement rate for GTAs considering that about four years ago, when service tax was introduced for the industry, the abatement rate was fixed only to set off the excise payment on diesel.
While service tax was imposed on other services like warehousing, packaging, loading and unloading, he said, the abatement rate has not been changed. Now there is a case to revisit the abatement rate.
The transport industry paid service tax of Rs2,833 crore in 2007-08, while in 2006-07 it was Rs2,475 crore.
Truck operators are also demanding exemption from payment of toll tax, introduction of specific duty rates on diesel.
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First Published: Wed, Jul 02 2008. 08 02 PM IST
More Topics: Strike | Transporters | Service Tax | Trucks | Toll |