GST impact on octroi check posts: Indian economy may get whopping Rs 2300 crore boost due to scrapping of state barriers

GST impact on octroi check posts: The abolition of check posts due to GST is expected to give a huge relief to truckers which in turn will help in massively boosting the Indian economy.

Written by FE News Desk

New Delhi

July 4, 2017 12:18 IST

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This seems to be the first and direct benefit to Indian economy due to GST implementation.

GST impact on octroi check posts: This seems to be the first and direct benefit to Indian economy due to GST implementation. The abolition of check posts due to GST, which binds the country under the one nation, one tax concept, is expected to give a huge relief to truckers which in turn will help in massively boosting the Indian economy. According to a report in Times of India, GST may help the Indian economy save up to Rs 2300 crore in transportation costs alone. Indian economy loses up to Rs 2300 crore per year in transportation due to truck delays at state check posts, the TOI report added. According to a 2005 World Bank report, “Truck delays at the state checkpoints have been estimated to cost the economy anywhere between Rs 9 billion and Rs 23 billion (Rs 900 crore – Rs 2300 crore) per year due to loss of truck operating hours.” But now under GST, delays at check posts is expected to go away with several states including Karnataka, Andhra Pradesh and Tamil Nadu already having done away with border check posts post July 1 – as many as 22 states have done away with the posts, a Finance Ministry statement revealed yesterday. These include West Bengal, Delhi and Maharashtra. Moreover, according to Union Finance Ministry, 8 states, including Assam, Punjab, Himachal Pradesh, and some north eastern states, are also in the process of abolishing check posts. The state level check posts in the pre GST era were used to collect taxes on the movement of goods.

According to Revenue Secretary Hasmukh Adhia, the check posts will become a thing of the past but there are a few check posts like the state excise check posts. State excise is the state duty on liquor/alcohol, now these things may remain, as per a report in TOI.

According to the draft rules, GSTN (Goods and Services Tax Network) would generate e-Way Bills which will be valid for 1-15 days, depending on the distance to be travelled – one day for 100 km and 15 days for more than 1,000 km transit.

For e-Way Bill, companies can pre-register online for movement of good above Rs 50,000 and the tax officials can inspect the e-Way Bill anytime during the transit to check tax evasion.

This article was first uploaded on July four, twenty seventeen, at eighteen minutes past twelve in the night.