Freight cost expected to drop by 4 per cent with GST on roll: Tiger Logistics

Harpreet Singh Malhotra, Chairman & Managing Director, Tiger Logistics (India), says, “Transport services (railways, air transport), will be under the five per cent category because their main input is petroleum, which is outside GST ambit. Freight charges are expected to come down by four to10 per cent following the imposition of a uniform five per cent GST rate for goods transport in all modes, and the input tax credit benefit for transporters, third-party logistics firms, common carriers, packers and movers and freight forwarders. At present, the retail goods booking and delivery service providers (goods agents) levy a service tax on gross freight charges displayed on consignment note at 4.75 per cent. If the input tax credits are taken into account on GST on purchase of vehicles, tyres, insurance cover and other goods and services by common carriers, retail goods booking agents, the impact of five per cent service tax will be neutralised. So, freight cost is expected to drop by over four per cent with implementation of goods and service tax. The proposal to give input tax credit will encourage several unorganised truck-owners to register themselves under GST.”