GST Council Creates Havoc after Imposing Tax Rates on Rail and Road Transport

Soon after the GST council decided the tax rates which have to apply to the goods and services, it is speculated that there is a danger of an imbalance between the different sectors of transport related to GST rates. Transport industry experts have expressed concern over this and said that released rates would prove harmful to the growing economy. Elements of both the roads and railways are rising due to GST rates and both have raised the demand for a reconsideration of the rates. The GST Council has kept trucks, buses, and tires under the purview of 28 percent GST in the road sector, while 12 percent GST has been proposed on container transport in the railway. The sector is going under introspection to conclude the emerging issues so as to tackle the combat of upcoming financial and government provisions all at the same time.

Indian Institute of Transport Training and Research (IFTRT), a transport sector organization has written a letter to the council chairman Finance Minister Arun Jaitley and Amit Mitra, President of the state’s Empower Committee on this matter which questioned the 28 percent GST tax rate on trucks, buses, and radial tires. The industrial leaders have been thoroughly investing the reasons as to why the highest luxury tax rate has been applied. It seems that the problems have been resurrected for the sector by putting a luxury rate over the commonly used goods and services by the GST council.

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IFTR convenor S. P. Singh has written in the letter that considering the commercial vehicles and their radial tires as luxury items, it is unfortunate and harmful to the economy. This move will already make it difficult for the automobile industry running under financial pressure to implement BS-4 emission standards. Rather than giving GST rates rationally to the industry, the government is increasing its problems. This will not only increase the cost of the industry but also the government’s intention of declining electronic toll collection, pollution through advanced vehicles will also fail. Overall, these rates will prove to be fatal to the economy along with road transport.

Some similar views have also been expressed by the Railways as there is a problem regarding the imposition of 12 percent GST rate on the container traffic service. While only 5% GST will be applicable on other freight traffic and passenger traffic services. Officials of the Railway Board have expressed negative views towards this move of the government. As earlier, it was speculated that the new norms regarding the emissions would be taking a toll on the industry but now the announcement from the GST council will take some attention from the experts and analyst to create some bridges to gap the differences.