Impact of GST on Transportation Services in Faridabad

Way before GST was implemented in India, the think tanks in the country believed that its implementation will create a positive impact on the Transport industry of the country.

The think tanks in the country say that the implementation of GST will lead to increase in the Consumption- led growth, thereby decreasing the burden on the consumer.

Before GST, the percentage of tax on indigenous goods was roughly 30%. And after implementation of the GST, revenue neutral rate is expected to become than the current tax rates on the goods. This has raised a hope in the private dealers providing Transportation Services in Faridabad, Gurgaon, Delhi and other parts of the country.

 A report by CII-PwC on the ‘Goods and Services Tax also predicted that GST will have a positive impact on the transportation and Logistic companies providing Transportation Services in Faridabad and other areas of the country.

Changes expected after implementation of GST

 Because of the seamless credits, Tax Cascading issue will decrease to a large extent.  The report said that when non-creditable taxes will reduce, procurement costs will also reduce. The report further predicted that the supply chain model in the country will become efficient than it is this time.

“The GST will make business easy and will contribute to the make in India plan of the Government of India. The implementation of the GST in the country is also expected to minimize the issue of tax cascading and multiplicity of taxes.

 GST will simplify the compliance process, as this transport sector is critical to the economy of the country.

Advantages of GST for Transportation industry

The benefits of GST for transportation industry providing services that are indisputable. There will be less idle hours for trucks, faster turnaround and the most optimal warehousing structure. This is considered the major advantage of GST for the transporters providing transportation services in Faridabad.

According to the estimates made in 2013, the transportation industry of the country was worth $130 billion annually. But since then this industry has grown in the country manifolds. But it is still scattered and unorganized. The main reason why it is still organized and scattered was the state level of taxation. The state level of taxation made supply chain inefficient and longer.   For example, the 50-60 percent of the time of the transportation services in Faridabad is spends in tax compliance and checkpoint maneuvering in the states. But after the implementation of the GST, this process will become easy and efficient than earlier thereby giving some breathing space to the transportation services in Faridabad.

 With the implementation of the GST in the country, the tax will be levied on goods transportation and credit will be available on interstate transactions. This is bound to change logistics setup & will ultimately lead to concentrated mega logistic chains.

 The paperwork will reduce paperwork that will result in the faster turnaround time for vehicles of the best transportation services in Delhi-NCR. The GST will make this industry more specialized. The principal transporters will connect manufacturers with the hubs. This structure will give birth to higher competitiveness, efficient sourcing and the Organized Trucking.

Author: Robin Gupta