The transport industry is benefiting with the implementation of the new indirect tax regime as entry tax at check- posts have been removed in the new regime. As per the documents prepared by the road ministry on the impact of logistics industry said that the travelling distance of truck drivers has increased nearly by 30% in the new indirect tax regime.
Due to the removal of entry taxes at check posts in the new regime, it saves time and reduces paper work. Apart from these, it also enhanced per day travelling speed of truckers. After the implementation of the new indirect tax regime, currently, truckers are travelling normally 300- 325 km in a day instead of 225 km in a day.
The booklet which is being shared by Government of India on social media cited that removal of entry tax at check- posts across India resulting in the reduction of congestion on highway routes. Apart from these, logistics industry would save unnecessary expenditures on tax compliance and deposit of interstate sales tax and also bring down the logistics cost by 10- 12%.
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Currently, the logistics cost is nearly 14% of the total value of goods as compared to 6-8% in developed nations. According to the booklet, the ministry has mentioned that truck drivers generally spend 20% of its run time at Inter- state check posts and travels 60,000 km yearly instead of two lakh km in the West. Let us understand with an example of Chennai- Kolkata route, previously 30% of the total travel time of truck drivers was exhausted at state border check posts and due to congestion, stated in a report.
An analysis of cargo industry in top 15 states before the implementation of GST regime (1st July). According to the booklet, on one hand, states such as Bihar and Maharashtra were exhausted averagely 20- 30 minutes at any state border check- posts while on another hand, states such as Bihar and Jharkhand were spending nearly two- hours at each border.
