Revolution on the Road: How GST is Driving Change in the Transport Industry


Revolution on the Road: How GST is Driving Change in the Transport Industry
Nov, 2023
By Vikash Dhanania


Namaste DOST!

Let's dive back into the colourful world of Akshay, the textile merchant from the vibrant streets of Kolkata, where the aroma of fresh rasgullas and the hustle-bustle of the tea stalls are as integral as the lively textiles he sells. This is a tale spun around the transport industry and the recent changes in GST regulations, effective from 01 October 2023, and based on the clarification given in Circular 202/14/2023-GST, dated 27/10/2023.

Our story unfolds in the heart of Kolkata, where Akshay's textiles are as beloved as the city's famous rasgullas. An unexpected twist arrives like a cup of piping hot chai when Akshay receives an order from Bangladesh requiring goods to be transported from Kolkata to Dhaka by road. With tight margins in the business and high freight costs, the deal becomes as tricky as getting the perfect sweetness in a rasgulla.

The transporter, sharing his wisdom like a seasoned tea vendor, explains to Akshay, "If you know where it's going (address available), it's outside India, and the foreign customer pays me in convertible foreign currency like US$, then it's like we have exported a service. I won't levy GST because of my LUT, making the deal as sweet as a well-made rasgulla."

However, the transporter then sketches a scenario where the address of the foreign customer is unknown. The deal then becomes domestic—subject to CGST and SGST, making it pricier for the foreign customer. In this scenario, Akshay learns that providing the complete address of the foreigner who will make the payment of freight can save the GST, making the deal more cost-effective for his foreign customers.

The transporter then sketches a different scenario where Akshay would pay the freight charges. He introduces Akshay to section 12 of the IGST Act, which initially seems as complex as making the perfect cup of Kolkata chai. To simplify it, the transporter explains, "Imagine we're on a boat trip from Bengal. The law sees us as travel companions, so I'll bill you with CGST and SGST. The silver lining here? You can claim the input tax, which will cut down your costs. Easy, right?"

Feeling overwhelmed by the labyrinth of GST rules, Akshay is introduced to GST DOST—the transporter's secret weapon in deciphering GST, as reliable as a well-brewed cup of Kolkata chai.

GST DOST emerges as a lighthouse in the stormy sea of GST. They guide businesses through the turbulent waters with personalized advice, timely updates, and strategic planning to help businesses save money and avoid compliance issues.

So, dear DOST, as you journey alongside Akshay's business adventure, remember that if you ever find yourself lost in the complex maze of GST, the help of GST DOST is just a sip of chai away. They are a beacon of guidance for anyone navigating the ever-changing skies of GST regulations.

Ready to sail smoothly through the complexities of GST? Connect with GST DOST today for a consultation and let your business soar to new heights, free from the burdens of compliance and the unknown. 

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