Logistics to gain most from GST; costs to dip 20 per cent: Nitin Gadkari
NEW DELHI: India's logistics sector stands to gain the most under the GST regime as costs will dip by almost 20 per cent, Union
Monitoring and collection of sales tax at inter-state check posts led to major traffic congestion at these points, resulting in slower movement of freight and passenger, and consequently higher costs and pollution, it said and added, an average Indian truck covers only about 50,000-60,000 km a year as against 3 lakh km done by a truck in the US.Minister Nitin Gadkari said today.
"India's logistics sector would gain the most from the Goods and Services tax (GST) as costs would fall by almost 20 per cent," Road Transport and Highways Minister Gadkari said.
He 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. This will not only reduce freight transportation costs, but also throw open many employment opportunities and reduce pollution levels," he said and added that investments worth Rs 2 lakh crore were committed at a recent logistics event.
As per a statement from the Ministry of Road Transport and Highways, the transport sector stands to benefit from the recently rolled out GST in several ways.
Pre-GST, the complex tax structure and paperwork forced the transport industry to spend a lot of resources on tax compliance and deposit of inter-state sales tax, it said.
"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 to the whole process. Efficient freight movement will also boost the demand for high tonnage trucks, which will in turn reduce the cost of transportation of freight," it said.
Pre- GST, the statutory tax rate for most goods worked out to about 26.5 per cent. "Post-GST, most goods are expected to be in the 18 per cent tax range," the government said
GST will serve to bring down the logistics cost to about 10-12 per cent by facilitating efficient inter-state flow of goods and accelerating the demand for logistics services