The Commerce Ministry has pitched for single Goods and Services Tax (GST) rate for multimodal transportation of vehicles to improve logistic services and reduce compliance burden on automobile manufacturers, an official said.
Multimodal transportation includes a combination of more than one mode of movement, such as rail, road or sea, for end-to-end delivery of goods.
Automobile industry body Society of Indian Automobile Manufactures (SIAM) had approached the logistics department of the Ministry raising issues faced by companies due to lack of a clearly defined multimodal GST structure.
In the present scenario, manufacturers and their logistics service providers have to deal with the issue of variable GST rates, applicable on various sectors of the entire multimodal transportation process, according to SIAM. They have stated that currently there is no clearly defined multimodal GST structure in place where vehicle makers could hand over finished goods through a single document to a third-party logistics service provider from the factory on an end-to-end basis.
The government official said that the current structure is leading to complexity in the entire taxation system that often leading to certain inefficiencies.
The Ministry has suggested the GST council for single GST rate for multimodal transportation of vehicles, the official added.