The over 4 million truck operators owing allegince to the  All India Motor Transport Congress (AIMTC), that went off the roads on Wednesday, 2 June  2008, called off their strike this morning following intense 12-hour long negotiations between the transport ministry and AIMTC representatives that resulted in the government agreeing to their major dermands. (See: Truckers on indefinite strike)

The AIMTC called the 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, which transporters said 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.

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.

The AIMTC said that the negotiations had led to agreements on the major issues raised by them, including concessions in the payment of service tax for auxillary services like warehousing and handling, replacement of the advalorem duty on diesel with a fixed rate duty structure chargeable on a per-litre basis and a freeze on road toll taxes for a year on the government-funded parts of the national highway, which had been raised by 50 per cent in February 2008.

A senior ministry official said the freeze in road toll would lead to a decline in government revenues.

The centre says it will pass a law to enable state governments to fix a maximum ceiling rates for duties on the sales of diesel. Truck operators had been hit by the 10-per cent increase in fuel prices in June, for the second time since February this year to offset the losses incurred by state-run oil marketing companies.

The government has also instructed state-run oil marketing companies to make available non-branded diesel at all their outlets across the country, so that transport operators do not have to pay a higher rate for premium fuel.

The striking goods transport agencies control over 90 per cent of the total cargo carried over road and a prolonged strike would have hurt India's economy. The strike is estimated to have caused 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.