Pollution check blow to vehicle owners

They will have to cough up 12 pc service tax

Vehicle owners feeling the pinch of fuel price hike will now have to pay over 12 per cent service tax for pollution check of their vehicles.

This implies that diesel cars owners, who pay Rs 100 for the pollution check at present, will end up paying Rs 112.36. Petrol car owners paying Rs 80 at present will be required to shell out over Rs 90, while two-wheelers will be charged around Rs 69, in Delhi.

The exercise follows the government’s decision to levy 12 per cent service tax on all services, barring a few in the negative list, from July 1 this year. The negative features about 38 services.

According to rules, service providers with less than Rs 10 lakh turn over per annum are exempted from paying service tax. Until now, pollution control centres enjoyed this benefit. However, with inflated earnings, some of them have now come under the purview of service tax.

Raising the pitch against the government’s move, the petroleum dealers association contended that the exercise will discourage people from getting their vehicles checked every three months, as mandated.

The association has already written to the finance ministry, the chief Minister of Delhi and the transport department in this regard.

“A significant percentage of the motoring public is not getting their vehicles checked regularly for reasons not difficult to understand and this additional burden of service tax shall aggravate the situation,” Ajay Bansal, General Secretary of the Federation of All India Petroleum Traders, stated in the letter.

Bansal also took up the matter with Minister of State for Finance S S Palanimanickam on Tuesday.

Finance ministry sources told Deccan Herald that the minister assured Bansal of considering his appeal. “We will look into the matter,” Palanimanickam said.
A little over 25 per cent of the vehicles have a valid pollution control certificate in Delhi. The number is not very encouraging elsewhere.

Bansal also said cost of compliance with the service tax regulations may immensely burden the petrol pumps, which will have to collect the taxes and deposit it to the Centre.

“The service tax levy on pollution check activity might not mobilise very significant revenue to the exchequer as the overall revenue from this is not very high,” he said.

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