Transport companies are now insisting traders furnish their GST numbers before accepting goods for transportation anywhere. Traders who have not acquired GST numbers will not be entertained, some transporters told Business Standard.
Ashok Shah, chairman of V- Trans, a large Mumbai-headquartered logistics company and past chairman of Bombay Goods Transport Association confirmed the development. He said, "Octroi being subsumed in GST is a big relief and will save both, time in transit and fuel. However, for transporting goods, the sender's GST number is required, because given the way tax provisions for transporters have been structured, that becomes necessary".
Under the old tax regime, transport services suffered 5 per cent service tax. That rate has been retained under GST. However in their business, transporters did not have to be registered, collect taxes from the sender on rent or transport charges and deposit them with the government. This responsibility vested with the sender who paid transport charges. He was responsible for depositing the tax with the service tax department.
Under GST, if transporter doesn't take the GST number, then he will have to register with the department and collect and deposit tax, which is an arduous task for players in this segment, many of whom are unorganised or run very small businesses. This is the reason they insist on GST number from traders. "If you have yet not taken GST number, don't send your goods to us," said another small transporter.
Even an aggregating agency running a cargo service said that it is asking the sender for his GST number. Narrating his experience, a senior official this agency said, "We were rotating some of the cargo to another company who was insisting on the GST number from receiver of goods also, if the document mentioned valuation of goods."