Free movement of goods across India: Is it a myth or reality? Ask anybody in the truck industry, and the first reaction will be “what free movement, we are having a tough time on the road and face many hurdles.”

Take the case of check-posts. “We are not sure for what reason our vehicles are held up at the check-posts,” said a truck owner. This view is recurrent across the industry. And there are other hurdles — checks by officers from sales tax, excise department or forest departments.

But delays at check-posts remain a major concern for the truck industry. Vehicles are stopped at State borders, checked for payment of taxes and levies on the goods carried and for compliance of various provisions of the Motor Vehicle Rules.

Mr M.K. Janardanan, of Chennai-based Okay Transport, said for a truck travelling from Chennai to Delhi, an additional cost of nearly Rs 2,000 is included in the freight for payment at various check-posts. Despite having all documents the drivers often end up paying the amount, he said.

Multiple and sequential checks conducted by various agencies result in vehicles being detained several times. The detention causes slower deliveryloss of time, high fuel consumption and idling of vehicles leading to under-utilisation of transport capacity. This adversely affects operational viability, according to the National Road Transport Policy of the Ministry of Road Transport and Highways released four years ago. “This is still valid, and nothing has change,” he said. Better roads and vehicles, leading to faster travel, may be offset by Inter-State Check-posts. Essentially the checks made at border posts aim to ensure that taxes in the State of destination have been paid on the goods being carried; trucks are not overloaded; and trucks are being operated safely and are carrying valid papers.

Economic cost

The enormous economic cost imposed by the check-post system has been vividly brought out in Grand Trunk Road Improvement Project. It shows that the check-post system leads to delays in road freight movement.

The economic cost of such delay is estimated at a minimum of Rs 3,200 crore and a maximum of Rs 4,300 crore for 2004, the report then highlighted. It could be double the amount today, according to an industry source.

At a recent workshop on indirect tax laws organised by the Madras Chamber of Commerce and Industry, Mr Y. Mani, Regional Indirect Taxation Manager (South), Hindustan Unilever Ltd, said all the States have check-posts and some are really ‘notorious for their ingenious' way of holding up trucks. “We hear at least 10 cases of check-post detention a month.”

Customers demand timely delivery of goods but do not agree on reasons like delays in the check-posts. They want 100 per cent commitment on timely delivery of goods, he said.

Some of the reasons for detaining the goods at check-posts could be due to commercial invoice not being there; TIN (the Tax Payer's Identification Number is new unique registration number that is used for identification of dealers registered under Value Added Tax) not being there. It is the responsibility of the company to ensure that all documents are in order and as the requirements at the check-posts, he said.

Positive signals

Mr Mani said there are some positive signals in the smooth passage of vehicles in the highways. For instance, the Karnataka Government has implemented ‘green cards' to select companies just to ensure free flow of goods.

Based on a company's credentials and good tax compliance, the department is doing this.

Kerala's Finance Minister had a couple of years ago in the budget announced the issue of ‘golden cards'. But it never happened. This year, the State Government announced that it will be giving ‘Star of Trust' and it may to an extent help in easing the issue at check-posts.

Karnataka, Kerala and Andhra Pradesh have moved to electronic ‘way bill' Governance and with the given trend there seems to be improved hiccups in the truck movements. Tamil Nadu and Puducherry are exploring the E-form of way bill soon. “We can hope for a smooth passage in future,” he said.

Incidentally, the National Road Transport Policy too suggested adoption of a “single window clearance system” that could be applicable for all authorised charges and clearances at origin and at check-posts. It may be achieved through the use of common software in a single window checking facility covering all major departments at inter-state check-post on National Highways bordering adjoining States.

Effect of GST

While many in the industry claimed that Goods and Service Tax (GST) could remove barriers during transit of goods between States, there is apprehension that check-posts will continue to be there. Going by the discussions there is no word about the check-posts in the GST, said Mr Janardanan.

Mr Vijay Kelkar, Chairman, Finance Commission, in 2009 observed that it may be difficult to eliminate check-posts given the valid concerns of State Governments that the points may extend beyond collection of taxes and movement of goods to vehicle fitness examination, prevention of trafficking and collection of local cess. However, the fact remains that check-posts generate enormous delays in road traffic.

A truck travelling between Delhi and Chennai will need to cross five State borders and 10 check-posts. Delivery times for goods may be extended significantly because of delays at check-posts.

What appears to be egregious is that the same vehicle has to pass through two check-posts while crossing one border – one each of the exporting and importing State. Both the check-posts are often located within a couple of km of each other and the vehicle driver has to spend considerable time at both.

Perhaps, it may be possible for both the States to put up a combined check-post, where officials of both States could sit together and conduct their verifications. Or one State could handle traffic on one direction and the second State in the other. Essentially, there would be only one check per border for a goods vehicle. Such an arrangement would significantly reduce travel time, he said.

With the implementation of GST imminent (some say it could happen in April 2012), the truck industry is keeping its fingers crossed.

>raja@thehindu.co.in

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