The following is the text of statement made by Member, CBEC, Shri V. Sridhar while briefing the media, here today:-

"In their communication. addressed to Transport Ministry, the All India Motor Transport Congress (AIMTC) raised the following issues:

1) Toll Tax: Increase in toll tax is not justifiable.

2) Service Tax: Under the new taxable service "Supply of tangible goods for use", even single truck/tempo owner is levied to service tax.

3) Diesel Price: Duties on diesel should be specific-rated

4) Speed Governors and Mechanical Tax: Truckers are being subjected to harassment on these counts.

The issues pertaining to Department of Revenue (DOR) were :-

(a) Levy of service tax under "Supply of tangible goods for use" service on renting of goods carriage to GTAs for transport of goods.

(b) Certain procedural and implementation issues relating to collection of service tax.

Representatives of AIMTC met Secretary (Revenue) on 6.6.2008. During the meeting, the association was told that the issue mentioned at (a), above shall be examined carefully and as regards (b), they were asked to indicate specific instances, along with the copies of notices, so as to understand the nature of problem and issue suitable clarifications. Subsequently, as desired by the Association, a meeting was held with Shri V. Sridhar, Member (Budget & Service Tax), CBEC on 26.6.2008 with their representatives.

The issues above were earlier examined and notification No.29/2008-ST dated 26th June 2008 was issued fully exempting the truck owners, under the supply of tangible goods service, from liability of service tax in case of renting / hiring of their vehicles to GTAs.

A Fax message was received from AIMTC at 4.00 PM on 01.07.08, stating that their concerns are more broad based than the specific cases and service tax is only one of the issues on which a call for strike {chakkajam) has been given by them

It has been agreed in- a meeting at Transport Ministry to examine the issues in consultation with AIMTC and issue suitable clarification. The AIMTC has been invited today to give their views in this regard."

BSC/SS/GN-167/08

Service tax exemption for truck owners renting vehicles to transport agencies clarifies tax liability and prompts further procedural consultation. AIMTC challenged application of service tax under the Supply of tangible goods for use to owners renting goods carriages to GTAs and raised procedural and implementation grievances; CBEC examined the issue and issued a notification exempting truck owners from service tax liability for such renting/hiring, and sought further consultation with AIMTC to address remaining procedural matters.