Had the government chosen to impose a service tax on road transport, instead, it would have had enough leverage to circumvent the imposition of a cess on both diesel as well as petrol. Perhaps the government has chosen the cess option due to recent unsavoury events, which have left a bad taste.

One might recall that the service tax was imposed by the previous finance minister in the 1997-98 budget. A consequence of this was the transport operators' strike, the memories of which are still livid. Later, there was the agitation by the traders when the onus oftax payments was shifted, all of which led to the scrapping of the tax altogether by the current minister.

However, a study by the Indian Foundation of Transport Research and Training (IFTRT) suggests that the government could mobilise Rs 7,500 crore from a service tax of 5 per cent on the goods receipts issued by transport companies to consignors. In this light, this option needs a second thought specially since both the truckers and the traders, would be kept out of the purview of the tax collections. The cess on diesel, on the other hand, could make things hard on truck operators. This, in turn, could have a cascading effect on the fortunes of the commercial vehicle segment negating all the efforts of the government to revitalise the ailing sector.