The GST Council has reduced the tax burden on freight services, a move expected to bring down logistics costs for businesses, reports media. Taxes on multimodal transport within India, excluding air segments, have been cut to 5 per cent from 12 per cent.
Container and rail movement
Transport of goods in containers by rail, other than through Indian Railways, will now be taxed at 5 per cent without input tax credit (ITC) or 18 per cent with ITC. Earlier, this was taxed at 12 per cent with ITC.
For road haulage, the renting of goods carriages with operators, where fuel is included, will attract 5 per cent instead of 12 per cent. Third-party insurance of goods carriages has also been revised to 5 per cent from 12 per cent.
Goods Transport Agency changes
Goods Transport Agency services, used in bulk cargo movement, have been revised from 5 per cent without ITC or 12 per cent with ITC to 5 per cent without ITC or 18 per cent with ITC. No Compensation Cess applies to these categories.
The revisions are expected to reduce operating costs for transporters and impact door-to-door cargo charges, particularly for exporters. Firms will need to weigh the choice between lower rates without ITC and higher slabs with credit.