The government is considering more tax relief measures for transporters, senior tax officials said on Wednesday, as millions of truckers went on strike to protest rising fuel costs and higher taxes.
About five million truckers stopped ferrying goods, except fuel and some essential commodities, according to the All India Motor Transport Congress, or AIMTC. Trucks provide the transport lifeline of the country's economy and a lengthy strike would threaten not only goods supplies but also industrial output.
Last month, the government exempted transporters from paying tax on services offered through rented or hired vehicles. But truckers now want more tax relief.
A member of the Central Board of Excise and Customs (CBEC) said the government was considering steps to reduce the tax burden of transporters.
However, talks to end the strike collapsed after Highways and Road Transport Minister TR Baalu said it was not possible to roll back a hike in toll tax. "Yes, the hike in toll tax in February was too much, but it was through an Act of Parliament,” Baalu said. “It is not possible to roll back the hike.”
Baalu said rise in toll taxes in privately funded roads were linked to the inflation rate. For public roads, the toll rates are raised once in five years.
The relief could come in the way of an increase in the abatement rate, the proportion of the value of a service on which tax is not levied, from the present level of 75 per cent for goods transport agencies, said CBEC member V Sridhar.
Truckers have demanded increase in the abatement rate as input costs have risen after the widening of the 12 per cent service tax to new services like courier, packaging and loading.