GST rate on 3rd party insurance of freight vehicles slashed

The GST Council which had its 31stmeeting late last week in Delhi announced slashing of  rates on a number of items. From the perspective of the logistics and supply chain businesses, there are two critical initiatives. Firstly, the GST rate on third party insurance premium of goods carrying vehicles has been brought down from 18% to 12%. With road transportation accounting for 60 percent of the country’s total logistics business, this is slated to provide a major relief to the freight vehicle operators.

The storage of foodgrains on behalf of Food Corporation of India (FCI) has also been exempted from GST. “ The service provided by godown owner in case of lease with services, where the godown owner, besides leasing the warehouse, undertakes to carry out activities of storage and preservation of stored food grains, is the service of storage and warehousing of agricultural produce and the same is exempt,” a government release said.

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