Impact of Goods and Service Tax on transportation industry

Trucking got better with GST

Truck industry is probably the biggest beneficiary of Goods and Services Tax (GST) system. They never had an impression that India was one country before the Goods and Services Tax (GST) had been imposed. This was mainly because of different states behaved differently for entering into and exits from states. There were unnecessary tax collection centers and multiple document checkers making life of truckers difficult.

GST is multiple saver for trucking industry

Now, after GST has been in force, trucking business has started saving on time. Saving on time actually has many faces. Because of removal of state barriers for tax collection (i.e. various check posts of VAT, octorai and other local taxes). Truckers have been benefited to on the following:

Time saver - Actual transit time,

Reduced corruption – Because of elimination of unethical practices at these check posts,

_Emotional savior _– Mental agony of drivers during long wait at these places for no reason,

_More revenue _– Increase in number of trips for a truck can gives many benefits. The major one being generation of more revenue because of shorter journey time and many more associated outcomes.

Introduction of Electronic-Way bill

Well, initially it was seen as challenge by the industry but after completer adaptation of this tool, the usefulness has come to light.

The e-way bill was introduced almost along with the Goods and Services Tax in the year 2017 as an anti-evasion measure in bulk consignment transports. However many states took time for full implementation.

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Conception became reality

Before GST was rolled out, government had promised greater up-time for truck movement, less idle hours for them and faster turnaround time for the transporter as a whole. This is proving to be true. A 2000 km distance would have been a 5 to 6 days affair and dealing with corruption in the pre GST era, this has come down to almost 3 days situation in present time. It has also made life of truck drivers little easier.

Few pain points

The saddest part is, neither society nor the authority recognizes this trucking profession in a proper manner. Trucking as a whole is seen only as polluting, congesting device to the road/city. While transportation of goods remains one of the most tedious occupation which is on the other hand essentially is the most compulsive requirement for sophisticated urban living, it needs more soft corners in the mind of citizen and policy makers.

Truckers are now awaiting reform on toll systems which is also proving to be expensive on time and fuel spent at the toll queues. These toll gates are still causing clogging for highway traffic for unwanted and unknown hours. However Government has already initiated FasTag, whose complete implementation will give relief not only to the trucking industry but to the individuals also who travel frequently on highways. We will know more about FasTag in the upcoming articles. Meantime, you also can visit www.fastag.org for information.

Some discomfort: many official who got released of their check post duties have been assigned responsibility of checking trucks (abruptly by stopping then enroute and checking through documentations – popularly being called as the ‘flying squad’). Many state Governments have initiated this type of activity probably to check unwanted practice to take place because of no check post and/or to earn some revenue from penalties also. But truckers are undoubtedly not happy with this practice as this is again giving rise to corruption (even though govt has good intentions to cover).

Effective outcome

The effectiveness of the tax model is getting reflected in the bottom-line of the transport companies. People related to the stock market biz are bullish on the counters of the logistics business houses

Tags

• Logistics
• Transport
• GST
• Goods and service tax