India mulling more tax relief for truckers, say officials

NEW DELHI (Reuters) - India is considering more tax relief measures for goods transport agencies, senior tax officials said on Wednesday, as millions of truckers went on strike to protest rising fuel costs and high taxes.

Last month, the government exempted transporters from paying tax on services offered through rented or hired vehicles. But truckers now want more tax relief.

Two officials of the Central Board of Excise and Customs (CBEC) said the government was considering steps to reduce the tax burden of transporters.

The relief could come in the way of an increase in the abatement rate, the proportion of the value of a service on which tax is not levied, from the present level of 75 percent for goods transport agencies, the officials said.

"The government is considering this. We are hopeful of finding a solution," CBEC member V Sridhar told reporters.

"May be, if we decide on this, they (truckers) may get more abatement," he said.

Truckers have demanded increase in the abatement rate as input costs have risen after the widening of the 14 percent service tax to new services like courier, packaging and loading of goods.

Trucks provide the transport life-line of India's economy and a lengthy strike would threaten not only goods supplies but also industrial output.