Last
Monday, tomatoes were selling at about Rs10 per kg in
some areas of the country. By Saturday, the price shot
up to about Rs20. Likewise, prices of other fruits and
vegetables soared by about 25 to 35 per cent over the
week. And it is not inflation it is the truckers
strike that is responsible for the price rise.
Finance
minister P Chidambaram''s job is to raise revenues for
the government to run. Revenues are raised in the form
of taxes and duties. Here the minister has to be extremely
judicious so as to ensure the tax amount, apart from raising
appropriate revenue, is fair and equitable.
Over
the last decade, the major contribution to the nation''s
GDP has come from the services sector and it stands to
reason that the major contribution to the government''s
coffers should come from the services sector. Keeping
this in view, Chidambaram had announced in his budget
speech that service tax would be levied on the road transport
sector.
To
digress a bit, there are two types of taxes, direct
taxes and indirect taxes. In the case of direct taxes
the impact as well as incidence of the tax will fall on
the same person or entity. Let us take the example of
income tax, which is a direct tax. Here, the initial burden
will fall on the tax payer while the final burden will
also fall on him as he cannot pass on the burden to some
one else. In the case of sales tax, however, the initial
impact or burden falls on the manufacturer but the manufacturer
will finally pass on the burden to the consumer.
Services
tax is an indirect tax so the burden of taxation will
not fall on the trucker. So why the strike? The truckers''
version is that 99 per cent of the trucking industry comprises
an unorganised, uneducated class of people. Then, how
are they going to comply with formalities of payment of
service tax?
"Instead
of making transporters responsible for the collections,
the government can utilise the sales tax / excise department
as collecting agencies by adding the 10.2 per cent service
tax on to the sales tax or excise duty. In this way, the
compliance will be far better," said JM Saksena,
secretary general, All-India Motor Transport Congress.
So,
instead of paying 10.2 per cent service tax to transporters
on the freight bill, these agencies will have to pay 10.2
per cent extra as sales tax or excise duty as the case
may be.
"Moreover,
unlike many other service providers, truckers do not have
any fixed place of business. Today, I carry cargo to Kochi,
from there I might go to Kolkata or Assam. So, each time
a trucker makes a freight bill, he has to recover the
service tax and deposit it at different places. This is
where the small uneducated, unorganised truckers are facing
problem," he said.
The
contention of the truckers is that there is almost no
demarcation between the freight agencies and the truck
operators in many cases and thus many of truck owners
will end up having to pay the tax. The railways, their
major competitor, has been spared from this service tax,
which they feel is unfair. Also, the truckers are already
tackling the cost inflation with diesel prices having
increased almost 17 times in the last two years. Truckers
also argue that most truckers own two or at the most three
trucks and in their case the tax will significantly drain
their margins and threaten their survival.
Another
problem they have to face is the recent court decision
ordering the conversion of all vehicles over eight years
to CNG or scrapping them. All these issues had already
caused enough concern to the truckers before this tax
was introduced and they were pushed to this strike.
According
to the Maharashtra Truck Owners'' Association president,
Daljit Singh, trucks travelling over 1,000 kms had already
stopped plying since August 17 and the loading of vehicles
had been suspended since August 19. Some trucks and tankers
delivering milk, oil, vegetables and medicines joined
the strike on August 24.
The
government, in an attempt to calm the striking truckers
explained that the service tax would be levied only on
the freight agencies and not the truck operators and therefore,
would not affect them. Talks are already on between the
government and the truckers unions to ensure compliance
without affecting either revenue or jeopardising the survival
of small truck operators.
Assurd,
the truck operators who went off the roads on Monday and
stayed away till Friday was finally called off in the
wee hours of Saturday.
The
upshot of all this was that the road transport industry,
which transports 60 per cent of goods was crippled. It
brought about a rise in prices of basic commodities and
decrease in production, affected exporters, created a
dent on the earnings of daily wagers brought about the
dreaded spectre of price rise and inflationary pressures.
Who
benefited? The trade unions will collect their salaries
as will the bureaucracy. You and I had to pay more for
essential commodities while the nation lost a whopping
Rs450 crore a day.
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