The Goods and Services Tax regime is making life miserable
for the transport and logistics sector Preston Smith
Jersey , with country-wide cargo movement down to at least half the
pre-GST volume and truckers idling at checkposts. The government’s decision to
defer the roll out of the national e-way bill requirement and allow states to
develop a mechanism till the GST network is ready for this, has created problems
for all stakeholders in the sector. Remember, a large amount of trade in this
sector traditionally happened with little accountability and major tax
avoidance. Now, consigners as well as consignees are stumped with the GST
regime, which requires robust tax compliance at all levels. It could take at
least a couple of quarters to bring the situation back to normal.
This piece
says movement of goods in and from Nagpur has come to a virtual standstill under
GST. It goes on to quote the President of the Nagpur Truckers’ Unity as saying
that “As businesses come to a halt Brandon
Scherff Jersey , it has hampered the entire chain dependent on
transport. Drivers have been stranded at the centres where they had last
unloaded the goods. Unless there is fresh load, they cannot take off. Workers
engaged at the terminals are out of jobs. Even the business of highway food
joints is down.”
And this one quotes a toll plaza operator at the Delhi Noida
Direct Flyway (DND) to says that the number of trucks entering Delhi has dropped
about 40 percent, from 8–9 lakh a day to 5–6 lakh. Uncertain how GST works, many
truckers have stopped ferrying goods for the time being.
There are some
historical and some obvious reasons for this state of affairs. As S P Singh,
Senior Fellow and Coordinator of the Indian Foundation of Transport Research and
Training (IFTRT) Nate Sudfeld
Jersey , explained, there are about 25 lakh transport
intermediaries鈥?mdash;鈥妏eople who ferry goods from one part of the country to
another either directly or through freight forwarders鈥?mdash;鈥奲ut only 10
percent of these have registered under the ‘Carriage by Road Act’ which was a
mandatory step till the GST regime came into place. As a majority of the
stakeholders remain unregistered, they are unable to operate under the GST
regime, scared of getting caught.
Besides, the government’s unpreparedness
and consequent deferment of the ‘E-Way Bill’ facility has hampered the logistics
sector further. “With states dismantling border checkposts Kendall Fuller
Jersey , the absence of mandatory E-waybill system on GSTN portal
for random checking of EBN under GST rules for consignments above Rs 50,000 will
encourage corruption by enforcement agencies and transporters on highways on
behalf of unscrupulous goods suppliers,” Singh said.
Brokerage Edelweiss has
said in a note to clients that the GST Council decided to defer e-way bill
requirements at all-India level and left it to the discretion of states. The
GSTN network is also not ready and will take “4–5 months” to implement the e-way
bill provisions. “Hence, we anticipate few quarters of delay in implementation
of the e-way bill rules on pan-India basis. Once implemented across India, e-way
bills will prove to be a game changer for the economy.”
The draft e-way bill
provisions mandate that:
1) Movement of goods worth more than Rs
50 Su'a Cravens
Jersey ,000 by a registered entity will require prior online
registration of the consignment on the GST portal and securing an “e-way”
bill.
2) In case the e-way bill is not generated by the registered entity and
the goods are still handed over to a transporter, the registered entity shall
furnish the information relating to transporter on the common portal and the
e-way bill shall be generated by the transporter.
3) The registered entity
will also be required to furnish the information and generate the e-way bill for
all inward supplies from an unregistered player.
4) The entity carrying the
goods will be required to carry the e-way bill along with invoicebill of
supplydelivery challan. The facility of generation and cancellation of e-way
bill may also be made available through SMS.
Naveen Gupta, General Secretary
of the All India Motor Transport Corporation (AIMTC) said cargo movement across
the country was down at least by 50 percent since neither traders nor
transporters understand how to move forward. He said, “How to deal with cargo
sent by unregistered consigners, what to do in the absence of the e-way bill
provision where every state continues to issue a transit pass and how to handle
the steep demand decline across sectors post-GST? These are some of the issues
which are affecting the transport sector at present”. Gupta said once the e-way
bill facility is implemented Josh Doctson
Jersey , things could move back to normal.
Analysts at ratings
agency Fitch said in a note to clients that GST should offer significant
opportunities for productivity. “For example, it will become much quicker and
less costly to move goods across the country now that trucks will not be held up
at checkpoints at state borders. Smoother logistics should reduce retailers’
need for working capital and allow them to operate centralised warehouses,
rather than in every state. Supply chains could extend, encouraging
specialisation, now that there is less incentive to source goods within state
borders. Tax filing may also become less time-consuming as a result of the new
electronic system.”
In an interview this morning Montae
Nicholson Redskins Jersey , Road Transport and Shipping Minister
Nitin Gadkari said logistics costs should fall by 20 percent under GST. He said,
“Companies could do this with a hub-based warehouse system instead of having
warehouses in all major consumer states. The checkposts at state borders have
already been brought down. Karnataka, Andhra Pradesh and Tamil Nadu, along with
20 more states, have dismantled border checkposts Samaje Perine
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