GST cuts down travel time, but by driving traffic down on highways
BS reporters travel on trucks on two key routes from Delhi to find changes on the ground
The introduction of the goods and services tax (GST) has reduced the travel time of goods-laden trucks plying across states. But, the reduction is more due to thinner traffic, as scared illegal transporters are staying home, than because of lesser red tape.
While a 15-20 per cent cut in travel time, claimed by some government officials, is not uniform across the country, and at best is limited to certain pockets, its durability could be put to the real test when the highways bounce back from the GST-induced lull.
Business Standard reporters travelled on two trucks on opposite directions from New Delhi to check out six inter-state borders en route. They also went to two of the busiest entry points to the national capital: Kalindi Kunj, where trucks from Uttar Pradesh arrive; and the Badarpur border with Haryana.
Two roads
The distance between Delhi and Chandigarh is 250 km; one crosses two borders: Delhi-Haryana and HaryanaPunjab (Lalru). The overnight journey was completed in six hours. On the other route, to Mumbai, the BS team crossed three borders: Delhi-Haryana (Rajokhri), Haryana-Rajasthan (Shahjahanpur), and Rajasthan-Gujarat (Shamlaji). It took 36 hours to cover 793 km between Delhi and Shamlaji, suggesting not much has changed.
Check posts are still there in Punjab and Gujarat; there were none at the others before the GST roll-out anyway.
Truckers, as well as ancillary service providers such as dhaba owners and shopkeepers, said the GST had only managed to slow down business. There are other factors as well that influence travel time, such as driver preferences, and introduction of digital payments at toll plazas. Sales tax inspections are also minimal, and there is widespread lack of understanding of the new tax regime.
Illegal business off roads
“Two things have changed in the past 15 days: Illegal transport of goods has completely stopped and there is hardly any queue at the border check points,” said Mohammed, a truck driver who drove us to Chandigarh.
Another reason for the fall in traffic was business persons were not transporting any goods except essentials, said a traffic manager at a transport company in Punjabi Bagh, West Delhi. “Most people are waiting and watching as they are not sure of the rules. Even chartered accounts are unable to provide proper advice.”
His claim was corroborated by two truck drivers on the Mumbai route. One of them, Raghu, said trucks were waiting in Mumbai for up to eight days as there were hardly any consignments to take back. Another driver, Nagender, said people were only sending rice and salt and other such goods, kept out of the GST ambit.
Truck rentals had fallen 10-15 per cent, said experts and transporters.
Jigyasu Wadhwa, owner of transport firm Okara Roadlines at Punjabi Bagh, said, “Detention time has gone up as there are hardly any bookings. This has hit freight rates.”
“Roll-out of GST without e-way bills means it has been implemented only on paper,” said S P Singh, senior fellow, Indian Foundation of Transport Research and Training.
With the e-way bills system in place, authorities would have digital tools to check consignment with value of over ~50,000 on the spot.
Singh said there were about 4.5 million trucks in the country. Considering older vehicles and smaller ones could take the number to six million. Of these only 1.3 million had all-India permits and another million bilateral or reciprocal permits allowing them to operate in two states.
“A major portion of transportation operated with illegality as part of business policy,” he said. Now these were off the road.
Most of the remaining 4 million vehicles operate intrastate only. Singh said 80 per cent intrastate trade was on, as GST had no impact there, but 40 per cent interstate trade was missing from the highways. Choc-a-bloc entry points At Kalindi Kunj, where trucks from Uttar Pradesh arrive in New Delhi, B N Tiwari, in charge of the entry tolls, said traffic had fallen considerably. Javed, a driver coming in driving from Noida, seconded Tiwari and said of the 100 trucks of his company only 30 had been booked.
Despite the reduced traffic, entry — at Kalindi Kunj and the Bararpur border — took about 30-45 minutes.
The delay is caused by collection of different tolls — one imposed by the National Highways Authority of India, another by the Municipal Corporation of Delhi, and a green tax following a Supreme Court directive. At the Badarpur border, the highway and municipal tolls were collected at the plaza, while the green tax was collected by officials with handheld devices about 100 metres away. On the DelhiMumbai route there are two dozen toll plazas; trucks usually pay about ~8,000 per trip.
The company that owned the truck in which we travelled had pasted a “fastag”, which allows cashless toll payment, on the windscreen of the vehicle.
We crossed 15 toll plazas on this route; only two had automated systems to read the “fastag”. Some had dedicated lanes for trucks with such tags, but other vehicles also often ventured into these, holding up traffic. At places where there were two dedicated lanes for “fastag” trucks, there would be only one handheld device to check the trucks.
At Paduna, between Udaipur and Kherwara, toll plaza officials could not read the tag. Nagender, our driver, had to shell out ~405. Check posts remain Check posts for sales tax were still working at some places, eschewing the reason for rolling out the GST.
Dhiraj Gupta, owner of Chamba Manali Transport, said the sales tax check post on the Delhi-Punjab highway at Lalru, near Ambala, was still functional. “The whole purpose of the GST is defeated if these barriers are not removed.” He added that such posts were still operational in Himachal Pradesh as well. “The state government is still insisting that truck drivers fill up Form 26A. Though now there is no charge, the hassle of filling up separate form remains.”
At Lalru, state government employees said they were stamping all the bills so that businessmen didn’t face any trouble while filing return on the GST Network. “Drivers don’t face any problems,” insisted Raman Singh, one of the officials manning the check post.
He added this would continue till September when the GST software and other infrastructure were operational. In Gujarat, too, new systems had not replaced old ones completely. Baheti (transit passes), mandatory under Gujarat value added tax, persist even now. Every dhaba leading to a border has a baheti counter.
Krishna Pal Singh runs such a counter with a laptop and printer near Parsad, about 50 km from the Gujarat-Rajasthan border. He said, “The new system is not too different. Earlier, we had to enter a CST TIN number; now we have to enter a GST number.” Some truckers were taking the pass, others were not, but the business which used to earn Singh ~1,000 a day was on its last leg. At Shamlaji, the Gujarat government checkpost was still functional. Cleaners from trucks would run ahead of their vehicles to get their bahetis stamped.
A bespectacled tax official said, “For all taxable items, the transit pass would continue.”
Showing Form 405 needed to make bahetis, he explained the older form quoted the Gujarat VAT Act, while the newer ones had relevant sections of Gujarat State GST Act.
“New tax; new paper,” he added.