Ministry of Road Transport and Highways has prepared a booklet on the benefits of GST for the transport sector.

The unified tax regime has obviated the need for interstate check posts.  This will result in reducing the travel time of long-haul trucks and other cargo vehicles by at least one-fifth, said the booklet.

“This, coupled with the proposed E-way bill that will require online registration for movement of goods worth more than Rs 50,000, will ease the movement of freight further, and bring in more transparency in the whole process” it added.

The booklet also said that efficient freight movement will also boost the demand for high tonnage trucks, which will in turn reduce the cost of transportation of freight.

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A single GST also means an optimized warehousing structure. Earlier, companies had to maintain warehouses in every state due to different taxation slabs, said the report.

Pre- GST, the statutory tax rate for most goods worked out to about 26.5%. Post GST most goods are expected to be in the 18 % tax range, it added.

According to Nitin Gadkari, the Minister for Road Transport & Highways and Shipping,  India’s logistics sector would gain the most from the Goods and Services tax as costs would fall by almost 20%.

He has also said that logistics parks are being set up at various places across the country to act as freight aggregation and distribution hubs. These logistics parks will enable long haul freight movement between hubs on larger sized trucks, rail and waterways.

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