The road transporters strike entered its second day today.
The striking trucker operators gained support from other quarters as those operating LPG and petroleum tankers have also joined the strike. Mini trucks and tempos are also likely to join hands with the striking truck operators.
Howevet, the transporters had earlier said that their strike would not affect the movement of essential commodities, even though goods transport agencies control over 90 per cent of the total cargo carried over road.
Earlier in July, the All India Motor Transport Congress (AIMTC), called a nationwide strike against the government's move to levy full service tax at the rate of 12.36 per cent on services like cargo handling, storage and warehousing services provided by transport agencies, saying this was against the agreement that they had reached with the government in 2004, when they were given an abatement of 75 per cent on the service tax payment for these services, apart from the goods transport service.
They had also wanted toll tax to be abolished and rationalisation of duty on diesel (See: Truckers on indefinite strike)
However, following a settlement, the strike was called off on the second day itself (See: Transport strike called off as government agrees to demands)
Meanwhile, the government ysterday agreed to remove service tax from some of sectors like cargo and handling, one of the major gtrievances of the transport operators.
The government has fully exempted certain taxable services from service tax, provided to a goods transport agency (GTA) by their sub-contractors These services are generally used by the GTA during the course of transport of goods. The specified services are:
(i) clearing and forwarding agent service;
(ii) manpower recruitment or supply service;
(iii) cargo handling service;
(iv) storage and warehousing service;
(v) business auxiliary service;
(vi) packaging activity service;
(vii) business support service; and
(viii) supply of tangible goods service.
The tax on transportation of goods by road is on the gross amount of freight charges (after allowing abatement of 75 per cent), which includes the expenditure incurred on the services mentioned above. Since no credit is available to GTA services, separately charging tax on these input services leads to double taxation, which would be mitigated now.
However, the truckers union says that the GTA-to-GTA service is not yet exempt from service tax.
As talks between representatives of the union surface transport ministry and the All-India Motor Transport Congress (AIMTC) have failed, 70 lakh trucks went off the roads from Monday.
The talks were held between AIMTC and transport ministry officers were led by joint secretary S K Dash.
The truckers wanted at least Rs10 per litre cut in diesel price and economic package for all truckers of the country. Their main grievance was that whereas the union government had cut the price of air traffic fuel eighth time in the past two months, bringing it down to Rs29 per litre from Rs74 per litre, the price of diesel, which was used by truckers, farmers, industry and other small transporters, had been reduced by Rs2 per litre only.
The truckers have also demanded that the government crack down on the alleged cartel of tyre companies, which has raised tyre prices from Rs17,000 per pair to Rs27,000 per pair. Despite a 40 per cent to 70 per cent fall in the prices of rubber in international market, price of tyres have not been lowered by the companies, the tranporters say.