India’s new tax system jacks up cargo charges

Manama : Cargo shipment charges to India have increased after the country implemented Goods and Services Tax (GST), a new indirect tax system, last week. The tax system came into effect on July 1 and it has caused confusion in the cargo sector. While many companies continue to accept shipments to India, some have stopped shipments. Those who continue to accept shipments have informed that customers will need to pay more.

“We are still accepting shipments to India, customers will now have to pay 1.6 per kilogram, four hundred fils more than what it was last week. However, there may be delays. While it used to reach in 15 days, it might take an additional five or 10 days to reach now.  We are not sending cargo through Delhi airport, instead we are sending it through Chennai,” a representative from Lotus Cargo said.  “Earlier we used to charge BD1.2 per kg and now we are charging BD1.8. But we are not expecting any delays, it will take a maximum of 15 days for the shipment to reach,” a representative from India Cargo Services said. 

“We have not changed our pricing, we will be charging the same amount initially but we have informed the customers that they will have to bear the extra costs from the tax. We will pay the tax initially and the customers will need to reimburse us the amount,” said Subash, an official from a Muharraq based cargo company.  Jineesh K, a manager at Classic cargo said that the company has stopped taking shipments to India. 

“The biggest issue is that many of the items such as household items and chocolates were considered tax free but now these items will be charged an additional 40 per cent,” he said