GST for the transportation sector and the commercial vehicle industry will dial significant changes.
GST would have rolled out by now, not relenting to the rising clamour for deferring it by a few months from a wide range of industries, and the banking sector. Apart from the deadline to implement GST, much has been discussed about its impact from the product taxation point of view; from the inflation point of view, and from the GDP growth perspective among others. The transition to the new tax regime under GST is likely to have a neutral or slightly positive impact on the commercial vehicle industry. Primary benefit would accrue from the removal of cascading taxes. Experts from diverse fields are of the opinion that GST in its current form does not differ much from the tax it will replace in terms of complexity, the number of tax slabs, and the huge burden of increased paper work.
With close to 60 per cent of the GDP contributed by the service sector, India in 2017 is largely a service driven economy. Manufacturing accounts for 25 per cent of the GDP. With GST simplifying a multitude of taxes on manufactured goods, compliance burden has increased significantly on the services sector, including the transportation sector. If the existing system requires service providers to pay service tax at a flat rate and file returns twice a year, under GST, the number of forms that are required to be filled increases to 37 in a year. This will lead to an increase in the compliance costs. Service organisations that operate in multiple states will have to register in each state that they operate in. This would be necessitated by the complex structuring of GST into Central GST and State GST. Many believe that GST is VAT 2.0 with improvements thrown in for good measure.
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