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Truck operators want vehicle fuel to be brought under GST

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The government should bring diesel and petrol under Goods and Services Tax (GST) to help transporters plan their operations efficiently. It is becoming extremely difficult for transporters to operate with daily fuel pricing, said Akhilesh Singh Yadav, President, Jamshedpur Transport Welfare Association.

About 20 days ago, the Centre and some States announced cut in taxes and the fuel prices declined by nearly 5 per litre but within a week it returned to earlier price. Transporters did not get any benefit from the cut, he said.

Price volatility

“A uniform fuel price across the country will be very useful for transporters. We strongly believe that diesel and petrol prices should be brought under the GST,” he said at the panel discussion, which was was part of ‘Lead the Road’, a ‘Transporters Meet’ organised in Jamshedpur on Friday by BusinessLine to highlight various issues related to transporters. The event saw over 160 truck owners in attendance.

The seventh edition of the event was presented by Indian Oil Corporation and powered by YES Bank with NewsX as the television partner. It provided a platform for various stakeholders, including truck operators, oil companies, banks, and ÑBFCs, to discuss issues and suggest solutions to the problems faced by the sector.

Echoing Yadav’s views, Kulwinder Singh Pannu, President, Jamshedpur Truck & Trailer Owners Welfare Association, too felt that bringing diesel and petrol under GST will help transporters significantly. Each State has different rate structure. It becomes difficult to track fuel payment despite drivers being provided with prepaid fuel cards, he said.

Shyamal Debnath, Chief Divisional Retail Sales Manager, Ranchi Divisional Office, Indian Oil Corporation, said uniform taxation across the country will certainly benefit transporters to plan better. Now, each State has different tax structure, and the fuel price is quite dynamic and based on international crude price.

“With a uniform fuel rate, definitely transporters can plan better, and improve their operations,” he said.

At present, tax on petrol and diesel are about 50 per cent of fuel cost. However, the maximum tax under GST, which has four tax brackets, is only 28 per cent. Thus, by bringing diesel and petrol under GST, the price of fuel will drop significantly, he said.

Shortage of drivers

Yadav also strongly advocated the need for setting up institutes across the country for training drivers in heavy vehicles to tide over the acute shortage of drivers.

To a query if YES Bank would be willing to fund the training cost for owners, Bhaskar Bhatnagar, Regional Business Leader – Commercial Vehicle Loans, YES Bank, said the bank is already giving working capital facility by way of refinance. Transporters can use it for educating and enhancing truck drivers’ lifestyle or training needs.

On the issue of declining heavy vehicle registration in Jharkhand, Pannu said owners prefer registering their vehicles in other States, especially Nagaland where the tax rate is the lowest in the entire country and registration can be done in just two days as against a month in Jharkhand.

“In Jharkhand, 80-90 per cent of heavy vehicles have been registered in Nagaland.. If all the relevant documents are couriered from Jamshedpur, within a week all the documents related to truck and trailers will be received. Whatever facilities other States are providing are not available in Jharkhand. Due to this, the number of Jharkhand registered trucks declined to about 1.5 lakh from 4.5 lakh,” he said.

The first in the series of 10 Transporters Meets was held in June at Namakkal, the hub of the trucking industry in Tamil Nadu, followed by the second in the port city of Kochi in July. The third was held in Vijayawada in August.

The fourth and fifth editions were held in September in Hyderabad and Pune respectively, and the one at Jaipur was held last month. Over 100 representatives, including truck owners, drivers and industry associations, participated in each event.

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