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The GST Council announcement regarding multi-modal transportation is expected to clear doubts over interpretation of tax by authorities, although it may not lower the logistics costs, point out industry experts.
Container movement handled by train operators, for instance, was not interpreted by some officials as part of “composite services” due to lack of clarity in language.
Welcoming the announcement, Kamlesh Gupta, President Association of Container Train Operators (ACTO) said, “For example, there was confusion on whether to treat handling of containers as a Composite Service in Multi Modal Transport. This was charged at 18 per cent GST — the prevailing rate for container train transportation — by some officials. As a result of the confusion in language which led to wrong interpretation and higher tax demands, most container train operators themselves started paying GST at a higher rate of 18 per cent on container handling charges. This modification clears all doubts.”
Another official from a container train operating firm said the clarification will not result in a drop in the cost of logistics.
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