The Indian Foundation of Transport Research and Training (IFTRT) has called for urgent rationalisation of Goods and Services Tax (GST) rates to promote the adoption of green commercial vehicles (CVs), fueleicient radial tyres, and simplified taxation for goods transport services.
In its representation to the GST Council ahead of the constitutional body’s next meeting, IFTRT has recommended slashing the GST rate on electric and CNG commercial vehicles from the existing 18 per cent to 5 per cent, aligning them with the concessional rate already available to electric passenger vehicles. The think tank argued that lowering the GST burden on green CVs would significantly improve their commercial viability and support India’s decarbonisation goals in the transport sector. The foundation has also sought a reduction in the GST rate on radial tyres used in trucks from the current 28 per cent to 18 per cent. Radial tyres offer better fuel eiciency, higher durability, and reduced environmental impact compared to conventional bias-ply tyres.
Another key demand from the organisation is the introduction of a uniform 12 per cent GST rate for all goods transport services, regardless of the mode — whether road, rail, or multimodal. At present, goods transport agencies have the option to either pay 5 per cent GST without input tax credit (ITC) or 12 per cent with ITC. IFTRT believes this dual-rate structure complicates compliance, especially for smaller operators, and undermines tax neutrality across the logistics chain. According to IFTRT, powerful public sector undertakings (PSUs) and large corporations mostly prefer 5 per cent GST under reverse charge mechanism (wherein the recipient of goods or services deposit the tax to the Government) in their transport contracts, while some adopt the 12 per cent GST for identical transportation services.
