Huge savings in freight cost and yes this will be kind of permanent savings to most of the extent. Why permanent? With electric vehicles penetration in passenger and goods vehicle oil demand was anyways falling nine pins with point of no return. India can reap benefits out of this opportunity like never before. Freight cost is the major cost for all industries especially manufacturing. Take any
product cost sheet and freight is the limelight of that cost sheet with every industry. Freight cost is majority fuel cost and than others. Fuel cost in India is driven by two factors world crude oil prices and another specific to India is excise duty and state taxes on petrol and diesel. With crude oil prices turning more than favourable question remains if tax component. Currently petrol price consists of more than 60 to 70% in taxes. If GST Council takes a simple call of shifting petrol and diesel from excise to gst regime end consumer will have to shell out just 28% gst rate instead of current 60 to 70% excise and state taxes. If all falls in place we are looking at unprecedented fall in India’s inflation rate from 5 to straight 1 or sub 1 levels which will place India in category of developed economies like U.S.A. AUSTRALIA EUROPE where inflation is stagnant since years at 1 or sub 1 levels. Is India economic super power in making with unprecedented fall in crude oil prices.Time will only tell with right decision making all around it seems quite possible.
product cost sheet and freight is the limelight of that cost sheet with every industry. Freight cost is majority fuel cost and than others. Fuel cost in India is driven by two factors world crude oil prices and another specific to India is excise duty and state taxes on petrol and diesel. With crude oil prices turning more than favourable question remains if tax component. Currently petrol price consists of more than 60 to 70% in taxes. If GST Council takes a simple call of shifting petrol and diesel from excise to gst regime end consumer will have to shell out just 28% gst rate instead of current 60 to 70% excise and state taxes. If all falls in place we are looking at unprecedented fall in India’s inflation rate from 5 to straight 1 or sub 1 levels which will place India in category of developed economies like U.S.A. AUSTRALIA EUROPE where inflation is stagnant since years at 1 or sub 1 levels. Is India economic super power in making with unprecedented fall in crude oil prices.Time will only tell with right decision making all around it seems quite possible.
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