Truckers across the country stopped ferrying goods today, as part of an indefinite strike demanding abolishing toll tax and rationalisation of duty on diesel.

The strike, that started in the early hours today, has been called by the All India Motor Transport Congress (AIMTC), which claims the support of all state transporters' association with a combined fleet size of 4,800,000 trucks affecting the movement of goods and esential household commodities.

The AIMTC has called a nationwide strike against the government's move to levy full service tax at the rate of 12.36 per cent on services like cargo handling, storage and warehousing services provided by transport agencies.

Transporters  say this was against the agreement that they had reached with the government in 2004, when they were given an abatement of 75 per cent on the service tax payment for these services, apart from the goods transport service.

Talks between the apex body of transporters and the union highways, road transport minister T R Baalu to work out a solution failed.

AIMTC president Charan Singh Lohara told reporters after the meeting in New Delhi this morning "We will continue with the indefinite strike." Yesterday, he said that truckers want the advalorem duty on diesel to be replaced with a fixed rate of duty on per litre of the fuel.

The striking goods transport agencies control over 90 per cent of the total cargo carried over road.

AIMTC has alleged that the government has been encashing on the international crisis on crude oil prices many-fold and forcing the truckers to buy premium diesel at higher and unregulated prices.

The strike is estimated to cause a daily loss of over Rs1,500 crore as road transport acounts for nearly 75 per cent of the movement of cargo like cement, fertilisers, food grain and steel, household FMCG products, electronics and white goods, vegetables and food stuff.

However, the current strike may not have an immediate impact for the next four or five days as unlike previous transport strikes called by the AIMTC, when  booking of consignments ceased being accepted a week prior to the date of the strike, this time bookings and delivery of cargo continues uninterrupted till early this week.

Moreover the duration of the strike would determine the severity of the impact, particularly on price increases on account of shortages. If the transporters and the government are able to work out a setlement over the course of this week, the impact is likely to be marginal. Any delay in calling off the strike beyond four or five days is expected to cause supply pressures, more so for perishables like fresh vegetables and fruits.

Former AIMTC president Gurinder Pal Singh said, that they expect the finance and transport ministry to intervene to find an amicable solution to the issue by tomorrow.

It is likely the government might be constrained to seek an early settlement with transporters to in view of the steadily worsening inflation that has been pushing up prices in a pre-elction year.