Union Finance Minister Pranab Mukherjee exempted vehicles with contract carriage permits from service tax in his Budget presented on Monday.
“In order to bring parity in tax treatment, I propose to exempt such transportation also from the levy of service tax,” Mukherjee said in his speech.
Vehicles with stage carriage permits and run by state undertakings are already exempted from service tax.
“This will not have any major impact because service tax was always passed on to the consumers. All our major demands find no mention in the budget, there is nothing to cheer,” Charan Singh Lohara, president of All India Motor Transport Congress said when asked if the exemption help transporters.
Transporters have been asking for exemption of service for the past nine years and have stated that they should be exempt from service tax, as they were not operating their vehicles as tourist buses but as mere mode of transportation.
“Overall, we have seen almost nothing for the travel, aviation and hospitality sector besides the increased allocation for the Commonwealth Games and removal of the Fringe Benefit Tax,” Ankur Bhatia executive director, Bird Group, said.
“The finance minister has not considered infrastructure status for the travel and hospitality sector, which is disappointing. Airlines have not been given any relief by way of ATF reduction, so that they can reduce their losses.”