The Hindu : National : Service tax likely on goods transport agencies by Nov.

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Wednesday, Sep 15, 2004

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National

Service tax likely on goods transport agencies by Nov.

By Our Special Correspondent

NEW DELHI, SEPT. 14. In keeping with the agreement between the Government and truck operators at the resolution of the nationwide strike in August-end, the Finance Ministry has set up a 13-member committee to work out the mechanism and modalities for collection and payment of service tax on goods transport agencies.

The committee, which will have its first meeting here on September 17, has been asked to submit its recommendations as early as possible, but not later than October 26. The Government intends to impost the 10 per cent service tax from November 1. The committee has three members from the Government, one senior representative of the Indian Foundation of Transport Research and Training and rest from the transport business.

It has been asked to suggest modalities for collection and payment of service tax on goods transport agencies to ensure that truck owners or truck operators are not required to collect or pay the tax.

Consignment note

Other terms of reference include suggesting an appropriate format of "consignment note'' for purposes of service tax, identifying "commercial concerns'' which would be liable to collect and pay the tax and suggesting draft rules and notification to give effect to the modalities for collection and payment of service tax. The committee has also been asked to suggest suitable methods (by way of abatement, credit, etc.) for arriving at the taxable value of the service.

According to sources in the transport industry, the broad framework for the modalities and mechanism of collecting the tax is already available for the committee which will enable it to finalise its recommendation at the earliest, unless there is stalling by some segments of the transport industry.

The sources also said that while the annual collection through this tax could be a substantial Rs. 12,000 crores to Rs. 14,000 crores annually, the compliance this year is expected to be low since the process of registration and other formalities would take time

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