Few industries are as demanding as transportation services. SRKA & COMPANY helps transportation and logistics companies take swift and decisive action in the face of unforgiving timetables, complex pricing decisions and volatile fuel costs.

We service:

  • Airlines
  • Passenger Transportation Companies
  • Cargo Handling Companies
  • Freight & Logistics Companies

Major Fiscal Incentives for Logistic and Transportation Sector

Various fiscal incentives are provided by the Government of India for promoting Logistic and Transportation in economy  Some of the key incentives are outlined below:

GST on Transportation

The unified tax regime has obviated the need for inter state check posts.  This will result in reducing the travel time of long-haul trucks and other cargo vehicles by at least one-fifth. This, coupled with the proposed E-way bill that will require online registration for movement of goods worth more than Rs 50,000, will ease the movement of freight further, and bring in more transparency in the whole process. Efficient freight movement will also boost the demand for high tonnage trucks, which will in turn reduce the cost of transportation of freight

Pre- GST, the statutory tax rate for most goods worked out to about 26.5%. Post GST most goods are expected to be in the 18 % tax range . India currently has  very high logistics cost – about 14% of the total value of goods as against 6-8% in other major countries. GST will serve to bring down the logistics cost to about 10-12 % by facilitating efficient inter-state flow of goods and accelerating the demand for logistics services.

Income Tax

Transport allowance in general could mean allowance provided for the purpose of transport. However, transport allowance under Section 10(14) of Income-tax Act,1961 read with rule 2BB of Income-tax rules can be either of the following:

  • Allowance granted to an employee to meet his expenditure for the purpose of commuting between his place of residence and office/place of duty
  • Allowance granted to an employee working in transport business to meet his personal expenditure during his duty performed in the course of running of such transport from one place to another place provided employee is not in receipt of daily allowance
  • Yes, Section 10(14) read with Rule 2BB provides for exemption of transport allowance. Exemption is as follows:
Transport allowance for commuting from place of residence to place of dutyRs 1,600 per month or Rs 19,200 per annum
Transport allowance for commuting from place of residence to place of duty for an employee who is physically challenged such as blind/deaf/dumb or orthopaedically handicapped with disability of lower extremitiesRs 3,200 per month or Rs 38,400 per annum
Transport allowance for employee of transport business for meeting personal expenditure during running of such transportExemption amount shall be lower of following: a) 70% of such allowance; or b) Rs. 10,000 per month