GST freight fear

There has been a drop in interstate movement of untaxed and under reported cargo, leading to a fall in retail freight charges after GST comes into picture.

Interstate retail freight rates are down by 40-50%, the sharpest decline in over three decades, said SP Singh, senior fellow at the Indian Foundation of Transport Research and Training (IFTRT).

India’s 6 million trucks range from 5 tonnes to 49 tonnes. Out of the total, 1.3 million have national permits and 1.2 million have permits for their home state and neighboring states, with 40-45% of them not running currently. Out of the remaining 3.5 million trucks that have permits for their home states, a fourth are idle, added Singh.

In the long run, the increased economic activity as a result of GST, will mean greater demand for trucks, raising the prospect of a big boost for the commercial vehicle market. Currently, everyone in the wholesale and distribution businesses are hesitant to dispatch untaxed cargo under the GST regime.