Cargo trucks covering 30 per cent more distance a day post-GST : Road Transport Ministry study

Posted by Daily Shipping Times on 27-07-2017        Tweet

NEW DELHI: The distance travelled by trucks per day has increased by at least 30% post the rollout of goods and services tax (GST), according to a document prepared by the Road Transport Ministry on the impact of GST on logistics sector. Trucks are covering 300-325 km a day on an average against about 225 km a day before GST, it said. the end of border checkposts across States, reduction in congestion on highways and logistics firms avoiding wasteful expenditure on tax compliance and deposit of inter-state sales tax would reduce the logistics cost by 10-12%.

At present, the logistics cost is about 14% of the total value of goods as against 6-8% in developed countries. The Ministry, in its booklet, mentions that typically a truck spends 20% of its run time at inter-state checkposts and covers about 60,000 km annually as against two lakh km in the West. Citing the example of Chennai-Kolkata route, the report says earlier about 30% of the total travel time was spent at border checkposts and due to congestion.

Quoting an analysis of freight movement in top 15 States before July 1 (pre-GST period), the booklet says while in States such as Rajasthan and Maharashtra where only 20-30 minutes were spent at any border on an average, there were States such as Bihar and Jharkhand where commercial vehicles would end up spending over two hours at each border.