ST on GTA – Persistent Revenue ultimately loses in Supreme Court
Service Tax on Goods Transport Operators was introduced with effect from 16.11.1997. But it was a jinxed tax right from the Day One. As the goods transport operators went on a nation-wide strike against the levy, the government brought a totally new and un-treaded path in the row to tax collection. Hitherto service tax was payable by a person providing a service. But in respect of service tax on goods transport, the government made the person who pays or was liable to pay the freight for the transportation of the goods, liable for payment of service tax.
In about eight months, realisation dawned on the government that it was after all not really worthwhile to collect tax on goods transport. The whole tax was exempted with the effect from 2.6.1998. In effect the tax was in force from 16th November, 1997 to 1st June 1998. But the ghost of this tax has been doing rounds clanking chains of alarming notes. The government which was prepared to forego the revenue from tax on goods transport from 2nd June, 1998 was surprisingly adamant about this tax for a short period from November 1997 to June 1998.
After retrospective amendments to the Act, the Government found itself in a weak spot that the amendment did not really help.
In an article in TIOL about five years ago, we commented,
Can somebody tell the Honourable Finance Minister that there was retrospective bungling in law making and can the FM tell Parliament that in spite of retrospective amendment, the law was not good enough to rope in goods transporters?
Now finally the Supreme Court has put the issue to rest by its judgement delivered yesterday, which we bring you today.Please see our BREAKING NEWS today.
Also see our article Service tax on goods transport stranded on the highway? and SERVICE TAX ON GOODS TRANSPORT: RETROSPECTIVE AMENDMENT DOES NOT HELP REVENUE!