MUMBAI, November 18: Angry traders across Maharashtra have threatened an indefinite strike to demand the shelving of the five per cent service tax which was levied by the Union Government on road transport services and is now being levied on end users.

The tax on transport services, in fact, constituted part of the revenue mopping exercise in 1996-97. The notification was to be effective from April 1997, but was kept in abeyance for almost eight months after the transport operators launched a 10-day agitation. Slightly amending its earlier proposal, the government recently revived the Service Tax, fixing the onus on users of road transport services. Eight categories, including factories, companies, corporations, societies, co-operative societies, body corporates and traders will now come under the purview of the tax, which became effective from November 16.

United under the aegis of the Federation of Association of Maharashtra (FAM), the traders today observed a token bandh. Terming the tax unfair, FAM Action Committee spokesman Mohan Gurnani told the press that traders would not load or unload goods until the government took a decision on the issue.With traders nationwide refusing to load or unload goods, the proposed strike is likely to throw business out of gear. The government can ill-afford to allow the situation to linger, said Gurnani.

Decrying the government for its approach, Gurnani said, ``While, on one hand, they talk about one-window approach and liberalisation, they are bringing in multiple agencies. It will be cumbersome to maintain registers for every process, corruption and harassment notwithstanding.''

Traders apprehended a cascading effect on prices of essential commodities.

The consumers, they feel, will be hit the hardest. A delegation of traders will meet Union Finance Minister P Chidambaram in the near future to plead their case. By switching the assesses and agency for its collection, the implications of the tax do not change in any way, Gurnani said. Whether the liability for the tax is that of the traders or transport operators, it is indisputable that the tax is ``obnoxious and regressive,'' throwing to the winds all the accepted canons of taxation, he added.

According to the government's stipulation, all those who touch an annual turnover of Rs 50 lakh will have to be registered with the Central Excise Department under the Sales Tax Act.

Given the current commodity prices, the turnover ceiling was too low, encompassing a vast majority of traders under the purview of the service tax. Gurnani said the traders were apprehensive about registering themselves with the Central Excise Department. A public meeting of traders will be held in Vashi on November 22, 1997 to chart the further course of action if today's bandh and representations to various authorities including Prime Minister Inder Kumar Gujral do not yield results.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.