GST provided much-needed reform to the logistics sector

GST provided much-needed reform to the logistics sector

The implementation of the goods and services tax (GST) ushered GST provided much-needed reform to the logistics sector in much-needed reforms in India’s largely unorganised logistics and transport sector, and helped speed up movement of trucks, according to industry executives.

Transporters and logistics players ET spoke to said the switch to GST led to at least 20% reduction in turnaround time of trucks after border checkposts were dismantled. Besides, they said, implementation of the e-way bill on consignments of Rs 50,000 and above was gradually freeing them from unnecessary checking by state government raid parties.

However, they said, full benefits of GST would only be realised with seamless passage through the currently clogged toll gates, along an end to harassment by state transport and tax authorities. The impact was much more in Uttar Pradesh, Bihar, Madhya Pradesh and Maharashtra, which were particularly difficult states for truckers to move through a year ago.

A recent Icra survey of 50 transport companies found turnaround time in road transport reduced 18-20% since implementation of GST. “There are already signs that introduction of GST is rapidly leading to reduction in time wastage and harassment at interstate borders as well as checking clandestine movement of goods,” said Vinayak Chatterjee, chairman, Feedback Infra.

However, SP Singh, senior fellow, Indian Foundation of Transport Research and Training, said a lot of states were late in implementing the e-way bill. “Maharashtra and Punjab implemented it only recently. It would take another quarter to fully assess impact. Also, state departments continue to create hurdles in movement of trucks,” he said. Singh said the government should also rationalise GST on transport services. Road transport and highways minister Nitin Gadkari told ET the sector had benefited most from GST. “Travel time of trucks has come down significantly as the country has become a common market with removal of border check posts in states. Ease of transportation has been our focus area,” he said.

Source : The Economic Times

One thought on “GST provided much-needed reform to the logistics sector

Leave a Reply

Your email address will not be published. Required fields are marked *