India’s shippers feel the shock as perishable exports are up for freight tax

  • December 2, 2022
  • News

The GST (Goods and Service Tax) that became mandatory on freight costs from 1st October onwards has begun to pinch the Perishable shippers in India. The trade groups representing reefer shippers are aggressive and threatening to suspend the exports citing the reason that the freight charges are expensive due to the 18% tax on air freight and 5% tax on the ocean.

To put pressure on the govt. to get the GST relief, the southern Indian body and other associations have requested their members to stop exports. As per the exporters, the Union ministers have not taken any action with regard to GST, despite an urgent plea. This is the first time that the exports have declined from India and have reported a dip of 16.6% every month.

The known sources revealed that the domestic reefer exporters are incompetent to contest with their counterparts from other low-cost countries like Sri Lanka, Pakistan, and Bangladesh. The export of fruits, meat, seafood, and vegetables has been reduced to the UK, and Middle East in recent weeks as freight cost has increased.
The 18% levy initiates competitive disadvantages amidst decreasing export orders. The experts state that GST has been added on top of the already existing lengthening credit-line curve and continually growing interest rates for exporters. Nations like Australia and Singapore, have zero-rated exports and the experts believe that our government should look at its decision.

The president of the Federation of Indian Export Organizations, A Sakhtivel says that the government needs to look into the request of the export sector and offer the GST exemption for exports that lapsed on 30 September as the freight rates are still prevailing at much-elevated levels.