The Hindu Business Line : Carriage by Road Bill 2005

WITH the Union Cabinet approving the introduction of the Carriage by Road Bill, 2005, in the winter session of Parliament, the commercial road transport sector is likely to witness major reforms.

The Bill, which replaces the Carrier Act, will regulate the goods transport business and protect the trade, according to the Indian Foundation of Transport Research and Training (IFTRT), an autonomous research body.

Once passed by Parliament, the Bill will mandate registration of all the goods booking companies and the filing of periodic details and delivery operations, to the Government.

There are over 1.3 lakh goods booking companies in the country that transport goods by road. Almost 75 per cent of the national cargo is handled by these companies with total annual freight charges of about Rs 1,60,000 crore.

At present, goods booking companies are not required to register themselves. According to the IFTRT, there have been numerous instances where the management of a transport company has made away with high value cargo and then started anew under a different name and title. With the mandated registration in place, the goods booking companies will be held accountable.

Moreover, the Bill will help generate a proper and regular database on the movement and variety of cargo in the country, and function as a scanner on the movement of taxed and un-taxed cargo.

As of now, there is no structured mechanism to record the entry and exit of road transporters engaged in cargo booking, according to IFTRT.

At present, the goods booking firms are engaged in ferrying unaccounted cargo at premium freight charges.

Even after the introduction of the Value Added Tax (VAT) regime in April, the goods booking firms continue to cause revenue loss to the State Exchequer, added the body. Calling the Bill the "single largest attempt to reform the commercial road transport sector since Independence," IFTRT has warned that goods transporters might resist the major features of the Bill as it calls for greater accountability.

"No doubt, the powerful lobby of goods transporters will resist the major features of the new Carriage by Road Bill and they may threaten yet another round of agitation along with other `demands' of truckers such as toll on highways, motor insurance, diesel price," said IFTRT.

The Bill also mandates that the absolute liability of the goods booking firm for safe delivery of cargo shall be at par with invoice value of the cargo.

Thus, in case of loss of cargo, the goods booking transporters will be required to pay the entire value or a certain value as agreed by the consigner and the consignee in the forwarding note.

The Bill is bound to generate a major shake-out in the commercial road transport business.

It will benefit serious players and bring about the much overdue, restructuring of the segment.

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