On the contentious issue of service tax, the government has agreed to honour the 2004 agreement, where the goods transport agencies (GTAs) were given an abatement of 75 per cent in the payment of service tax.
The government clarified that apart from the GTA services, other services like courier and cargo handling will also be considered in the same category and will enjoy a similar abatement.
The government has also decided to drop departmental proceedings against several GTAs on whom service tax arrears notice has been slapped.
A transport ministry statement on the agreement reached with the transporters stated that services provided by GTAs are classified in some cases also as courier and cargo handling services and subject to service tax on full value without abatement of 75 per cent.
To avoid disputes, all services relating to transportation of goods by road is to be levied service tax under GTA service only.
"We are very happy with the way the government responded and handled our issues", said Gurinder Pal Singh, ex-president, AIMTC.
On their second demand for a rollback of toll tax hike, which was effective from December 2007, the transport ministry has agreed that the increase in toll rates in respect of national highways, controlled and managed by the National Highways Authority of India (NHAI), shall be kept in abeyance.
The government has also assured the transporters that there would not be any increase in toll rates for one year for such national highway stretches. Similar benefit will also apply in case of operation, maintenance and transfer (OMT) contracts given by the NHAI for such projects.
This apart, for examining other toll-related issues, including the user fee rates, the government has decided to constitute a committee that will have representatives from the transport ministry, NHAI and AIMTC.
On the replacement of ad valorem duty on diesel, the transport ministry has recommended the finance ministry to look into the matter and find a suitable solution.
AIMTC launched the nationwide strike on Wednesday, alleging that its total operating cost for a truck per km had increased by over 17 per cent to Rs 13.50 per km from Rs 11.50 per km on account of the recent hike in diesel prices and higher toll tax and service tax.
