Many states will remove check posts for commercial taxes after GST kicks in. Currently, all trucks must halt at state borders.
The ‘One Nation One Tax’ slogan isn’t just about uniform rate, it is also about removing check posts at borders, which often clog traffic for hours, delaying shipment of goods.
While several states have been proactive in removing check posts voluntarily, much more are expected to dispense with the posts for commercial taxes on Saturday when the goods and services tax (GST) kicks in.
On Wednesday, the Bihar cabinet decided to stop checking of vehicles by commercial taxes department at six integrated border check posts and Madhya Pradesh too will do away with them.
Similarly, Karnataka CM Siddaramaiah has announced in the assembly that check posts will have no place in the GST regime but he did not specify the date.
What is, however, eye catching is that several states – from the “progressive ones” such as Gujarat, Maharashtra, Haryana, Rajasthan and Chattisgarh to UP, West Bengal and Odisha have done away with check posts.
UP was among the first ones dismantle its check posts in August 2008, while Bengal did so three years ago and Gujarat two years ago under Anandiben Patel.
But will this make life simple for truckers?
“Check- posts will not go away per se. Rather, checking of vehicles by only commercial taxes department officials would be stopped in adherence to rollout of GST,” said a Bihar government officer.
In Karnataka, the role of the physical verification centres will be to stop trucks and verify if the goods are as declared on the GSTN web portal.
Check posts virtually did the same job and officers suggested this system will continue till the replacement in the form of Electronic Way Bills takes off.
Among those who have done away with the border, UP has a similar system in the form of the mobile or flying squads, whose number has only gone up – and they play havoc at night.
As anyone driving into Noida from Delhi can tell you, there are lathi-wielding inspectors and employees from the commercial tax department, who often erect barricades and stop almost every commercial vehicle, often throwing the stick (quite literally).
During the day, they are a little more selective. And, this has not changed despite change of administration. So, in case of several states, check posts have been removed, only on paper.
When discussions on transition to GST began, the Centre was keen on reforming the current system to ensure trucks can move across borders freely.
After all, road transport accounts for 65% of freight volume. Although road infrastructure has vastly improved, stoppages at the state borders — some of which are notorious such as the one between Assam and West Bengal — have meant that average distance travelled by vehicles have remained constant for three years and are estimated to cost the economy around $6.6 billion (over Rs 40,000 crore), apart from loss of fuel, an IIM Calcutta study estimated.
Currently, all trucks must halt at state borders (with check posts), although only 1% were non-compliant with the documents required. As a result, the Centre backed a risk-based assessment and suggested E-Way Bills.
Officers said that discussions have focused on merging several of the 20 checks that authorities from the states and the Centre conduct. But the complicated rules and a strong lobby from the states has meant that the reform initiative has had to be postponed although GST is ready to be rolled out from Friday.
While state commercial tax department’s check posts will go away, local bodies will still need trucks and commercial vehicles to stop and pay taxes, such as the ones erected by the three municipal corporations of Delhi. Brihanmumbai Municipal Corporation (BMC), the only local body in Maharashtra which collects octroi, has volunteered to do away with check posts from midnight on Friday, but the removal of the structures will still take some time.