On road to GST, states okay single truck permit

• Transport Ministers Agree To National Permit Of Rs 15,000/Annum Per Truck 

Inter-state transport of goods is set to become hassle free and cheaper with the state governments agreeing to give up their powers to issue separate transport permits. Transporters would now have to pay an annual fee of Rs 15,000 per truck for moving across the country, according to the new rule agreed to by the states transport ministers on Friday.

The new national permit regime will strengthen the efforts to obtain a national market for goods and services through the proposed goods and services tax or GST that seeks to create a seamless pan-India market.Transporters would save about Rs 10,000 annually per truck on account of change in the permit regime, Indian Foundation of Transport Research and Training (IFTRT) co-ordinator SP Singh said.

The existing permit regime requires goods carriers to compulsorily pay Rs 20,000 annually per truck which allows it access to home state and three neighboring states. For each additional state, the transporter has to pay Rs 5,000. The state transport ministers have passed the resolution to implement the new national permit regime of Rs 15,000 per annum per truck, an official statement said. The road transport minister Kamal Nath has assured the states of compensation if there is a revenue loss as a result of new regime.

The minister has assured the states of compensation but the fact is that there would not be any loss as vehicle sales is increasing. Besides the contribution of state permits to exchequer is very less ranging from Rs 1 crore to Rs 50 crore, a road transport ministry official said. The new regime will also help cut down on operations cost for truckers as they would not have to stop at state borders on account of permit related issues.

Transport industry lobbyist such as All India Motor Transport Congress (AIMTC) have been demanding rationalization of national permit fees. The reduction in permit fee is, however, unlikely to result into lower transport charges for customers. The overall impact of the change in permit regime would have marginal impact on the total operating cost. The permit fee contributes less than 2% of the total cost, an executive of a Delhi-based transport company said.

Mr Nath has already written to finance ministry to devise ways for compensating states for losses from the proposed switch over to the single national permit system. The total revenue contribution from state permits to goods carriers is estimated to be around Rs 932 crore annually. The government is keen to implement the new permit regime from May 1 and would review the impact of unified national permit on state revenues a few months after the implementation.
The GST is expected to be rolled out from the next fiscal and will replace a plethora of state levies and central levies with a one tax, helping create a national market.

NEW ROUTE

The existing permit regime requires goods carriers to compulsorily pay Rs 20,000 annually per truck which allows it access to home state and three neighboring states

For each additional state, the transporter has to pay Rs 5,000

No relief for customers as permit fee contributes less than 2% of the total cost

The total revenue contribution from state permits to goods carriers is estimated to be around Rs 932 crore annually

The government is keen to implement the new permit regime from May 1 

Economic Times, New Delhi, 17-04-2010.