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Transportation & logistics is a much wider term. It covers various service providers and services provided by all modes of transportation (e.g., air, road, rail and sea). It also comprises related services such as warehousing, handling and value added services such as packaging, labeling, assembling etc. Transport service is used both as intermediate input and in final consumption. Also the transport equipments are subject to multiple taxation at both central and state levels. The present taxation regime leads to cascading effect of embedded taxes on the downstream industry (oil industry) which do not get rebated thereby leading to enhanced cost for such industry. This badly affects the economy.
The treatment of these services in other countries is not same as that of India. In Australia, almost all the related services provided and incurred are subject to GST and full input tax credit can be availed against these services. Whereas a refund mechanism is working for tourists in Canada. Tourists while leaving the country after their visit can claim refund of the GST paid during their tour. However, there are some rules which govern this refund mechanism.
Most of the sectors associated with transport and logistics in India are subject to indirect tax. However, there are certain transportation services which are not covered under service tax gamut. They are as under:
i) Transportation of persons by road transport.
ii) Transportation of persons by rail.
iii) Transportation of persons by air for domestic journey.
iv) Transportation of persons by air in economy class for international journey.
v) Transportation of persons by other than cruise ship from port in India.
To rationalize the present indirect tax regime for transport services, the 13th Finance commission?s Task Force has given some important suggestions:
i) The tax on vehicles and the tax on goods and passengers levied by the state governments should be subsumed in the GST.
ii) All transport equipments and all forms of services for transportation of goods and services by railways, air, road and sea must form an integral part of the comprehensive GST base over which both the central and state governments would have concurrent jurisdiction.
iii) The tax regime for the transport equipments and transport services should be the same as in the case of any other normal goods.
iv) It is not necessary to levy higher rates of taxes on vehicles as is the existing practice since it is proposed to subject the use of these vehicles to tax at higher rates through excise on emission fuels. Accordingly, the present practice of levying higher rates of taxes on vehicles should be done away.
Some steps have been taken in the Finance Bill, 2010 to cover some uncovered services mentioned above within the domain of service tax. Currently transport of passengers by Air is taxable in case of international journey only and that too restricted to classes other than economy class. Finance Bill, 2010 proposes to fully expand the scope of this service by bringing domestic air travel also in the net. The exclusi. Cheap Jerseys Cheap Jerseys From China Cheap Jerseys Wholesale Cheap Jerseys Free Shipping Cheap Jerseys Online Cheap Authentic Jerseys Cheap NBA Jerseys From China Cheap Soccer Jerseys From China Cheap Mens NHL Jerseys Cheap Mens Nike NFL Jerseys