Daijiworld Media Network - Bengaluru (SP)

Bengaluru, Aug 7: As per an estimate, over 20,000 trucks in the state have stopped moving around since Goods and Services Tax regime was ushered in from July 1 onward this year.

This information was given by president of Karnataka State Lorry Owners Association, B Chennna Reddy, who said that in the city itself, on an average, over 5,000 trucks are not earning hire since July 1.

Market analysts say that with the introduction of GST in the state, there has been a 50 percent fall in the transportation of services and goods. From the very first day of this new system ie July 1, these trucks have not been able to earn hire charges. As a result, revenue of about Rs 120 crore has been lost till now, and the loss rises at the rate of four crore rupees with each passing day.

After the GST system was introduced, there have been wide changes in the sectors of production and supply. This has also adversely affected the goods transportation sector. Lorry owners are facing a crisis and are seen struggling even to repay loan installments.

GST was introduced all over India as a single tax which replaced different taxes levied by state and central governments like VAT, excise tax, cess, entry tax etc. As there is no clarity among the producers, distributors, wholesalers and merchants on the fixation of tax rate, revision of rate, disposal of old stock, sale of new products and other issues as per the new system, the supply and distribution network has gone into a tizzy, which has adversely affected goods transportation sector, as per information.

The transportation industry has also been adversely affected because of the fact that many merchants who had not got themselves registered under GST have suspended their business temporarily. Some lorry owners said that they are struggling to get even 30 percent of trips as compared to May and June this year. Even when vehicles do not earn any hire charges, burden on owners continues to increase in the form of interest on loan, insurance, tax, salary of drivers, and general maintenance, which comes to not less than Rs 2,000 per day per vehicle. The transporters feel that unless officials clear the air of confusion about GST quickly and set right probems encountered in software usage, it is difficult to revert to the business levels of earlier period.

For example, items with packaging are taxed 18 percent, while their transportation attracts five percent tax, totalling to 21 percent by way of tax. Many people transporting household goods are opting to shift items without any packing to save 18 percent ax. The transporters are facing the issue of safely transporting these goods which have no packing, some truck owners said.