The combined effect of GST and FASTag on Trade in India

1. The combined effect of GST and FASTag on Trade in India India is poised to become a leading market in the world because of its advantages that are composed of many factors like demographics, the purchasing power of populace, and so on. The role of government in this scenario should be of regulator and facilitator. To make things occur in favour of traders and businesses, the Government of India (GoI) has been coming up with landmark legislation and problem-solving processes. Among them, Goods and Service Tax (GST) and FASTag can be considered as the game-changers without a doubt. Almost every government department is aiding to this momentum through their innovations and services. The onus of facilitating a seamless movement of goods is on the Ministry of Road Transport and Highways along with its allied wings like National Highways Authority of India (NHAI) and Indian Highways Management Company Limited (IHMCL). According to reports, the National Highways carry 40% of trade in the country, although they constitute only 1.7% of the Indian road network. To facilitate a smooth trade, the MoRTH and NHAI are leveraging technology in the best possible way. The National Highways Authority of India (NHAI), which is entrusted with the development and maintenance of National Highways in India, has been upfront in assimilating technology into processes. The recent addition to the NHAI’s list of innovations is FASTag, which operates on Radio Frequency Identification (RFID) technology. FASTag, which is developed by the National Highways Authority of India (NHAI) with its technology partners, also referred as Electronic Toll Collection (ETC) is also aimed to cut the transport time, costs, and to reduce congestion at National Highway Toll Plazas. Recently, the FAStags reached the one million Mark, hinting at a positive prospect. The landmark GST act which is in force from July 1, 2016, is transforming the way trade is happening within the boundaries of India. The GST subsumed many state-level taxes like OCTROI tax, entry tax, and other miscellaneous taxes; this has paved the way for truckers/traders to enjoy the hinder-free movement of goods across states. The Ministry of Finance has come up with the EWAY bills, which will lay off the burden of separate clearance for each State. Due to these active measures of the GoI and incorporation of FASTag toll collection, the freight transportation cost fell by 20% and will continue to fall, as it reduces the time consumed in the transportation of goods, decline in pollution and inflation. Both GST and FASTag are changing the dynamics of trade in India by providing the ease in business processes. India is going to witness an increase in investments in the Logistics sector soon, as many of the bottlenecks are being cleared by the Government of India.