Why not try the "Amul' model?

Ramesh Kumar from New Delhi

Not a single day passes without screaming headlines of slowdown of Indian economy in the media. Growth slowdown. That is,  the rate of growth has slipped to the five point something (sorry, Chetan Bhagat!).  Data confirms that the slowdown is  for real.

Certainly a cause for concern for all, cutting across which strata of society one belongs to. The  decibel levels of debate has attained the stratospheric sphere with the premature  obituary of the present government is already been written. No second term for Narendra Modi-led NDA beyond 2019.

One of the key concerns is the expensive fuel price tag: hovering around Rs.80 per litre for petrol and marginally lower for diesel. Revenue considerations of states to the maximum extent and the federal government of course has kept the petroleum products outside the GST purview. For transport fraternity, fuel is  a big  expense to fend for. So, the noise level expectedly is high. '

Yes, more than 100% marked up price of fuel over the landing cost is a public loot. However, the government contention that those marked up revenue is being spent on meaningful developmental expenditure is  yet to cut ice with the public. There's resentment. Petroleum ministry is openly began canvasing  for reconsidering the inclusion of fuel  in GST basket.

Will the GST Council, comprising all state governments headed by the Federal Finance Minster accede to this dire need is worth watching. Will it affect poll prospects of the ruling alliance in the forthcoming state elections and thus set the template for General Elections 2019 when the ruling party at the centre would be seeking a fresh mandate for a consecutive second term? Again, wait and watch.

Yes, the public mood is no longer the "Har, Har, Modi" of the recent past. However, it has not slipped into "Go, Go, Modi".

Besides the fuel imbroglio, the next Himalayan challenge before the transport fraternity is the raging debate among millions of them is: To go for GST registration or not. Hamletian situation.

A section of this segment, however puny, prefers the Full Credit Mechanism (FCM) necessitating GST registration on their own or dictated by the end user (read OEMs) and become eligible for Input tax credit. Another section prefers Reverse Credit Mechanism (RCM) warranting no GST registration, but at the same time, no input tax credit.

FCM vs RCM is more to do with the argument over capability to meet regular and mandatory filing of returns with the authorities by those opting for FCM route. Stay in the "no registration" group and avoid all paper work and pay 5% GST with no input tax credit.  Proponents of GST registration of FCM logic is: get registered, file returns as per legal mandate and grow. Grow?

*What is the meaning of "grow" here?*
 Since the GST roll out w.e.f. July 1, 2017, OEMs viz., the service seekers of transportation needs have indicated their choice. They prefer FCM route. That is, they prefer to deal with GST-registered transporters. No GST registration, no business, please, say OEMs. That's where the "grow" angle kicks in.

Transporters -particularly large fleet owners: 100 and above - see merit in FCM route for two reasons: one assured business, to survive; secondly, input tax credit when they buy new trucks or deal with other GST registered clientele. Some of those big transporters, not comfortable with FCM route, have been trying to convince OEMs of their option, but not succeeding.

It is early days of GST roll out and so let's stick to RCM and later when fuel gets into GST basket, then switch over to FCM is one line of argument. Corollarily, there is no backing out  of FCM at all. Once in FCM, it's eternal. On the other hand, there is option to shift from RCM to FCM.

What will be the fate of millions of small and medum size truck operators who are being wooed to go for RCM on obvious grounds of their incapacity to meet the filing of humongous paper work?  Transport lobbies are yet to decipher a solution, notwithstanding high decibel debates in selected quarters. Confused? Perhaps.

Not that these bodies are lying low. Every single day, one delegation or another keeps knocking on the doors of Finance Ministry in Delhi because the GST Council will be the ultimate authority to give or deny relief to transporers or anyone. Not that the Council is inconsiderate. At its regular meetings since July 1, it has met and conceded relief on various product or service categories. So, the transport fraternity has not lost hope of getting some relief.

How to convey our displeasure to the government is hogging time in the transport lobby groups.

The murmur of a nationwide transport strike at this juncture has few takers. It is not difficult to fathom for the lukewarm response to the strike proposal. The nature of transport business is such that, few have the wherewithal or gumption  to shut shop and keep  their fleet of the roads beyond 2-3 days. Can't recollect a  successful lengthy work stoppage in the past. Given the division among the transport fraternity, the ploy of divide and rule by government is a standard operational procedure!

*So, let us return to the crucial question: what's the fate of millions of small and marginal fleet owners?*

 Let us revisit their rationale for FCM, a sine qua non sort for ultimate end users: OEMs. Massive paper work, that each fleet owner cannot fulfil. It is a capability that can be built, if not individually but collectively. Various lobbies boast of district and taluka level transport associations. So, each such body can explore forming a co-operative model where fleet owners come together on the Gujarat Amul model and that secretariat handling the much-feared paper work. It is doable, but challenging. That way, to execute anything is tough.

Remember, the birth of All India Motor Transport Congress (AIMTC)? Those who are unaware, let it be said that the refusal of the British official holidaying in Simla/Himachal Pradesh to meet individual transporters regarding their concern  compelled them to form a body on the kutcha roads of Simla. They thought quickly as the British official gave a solution by telling them that he had no problem meeting them as a group and hearing their group concern.
 The transporters' pain in the pre-Independence India was so dire, it warranted the creation of a body which later came to be the AIMTC. So, the remedy is there for everyone to see.

From the transporters' perspective the situation is that critical  today. Like that time. The GST bombshell is trying to derail (is there a word, "deroad"?) their business.  Just not derail, but total eclipse of the bulk of small fleet owners.  If Gujarat kisans - marshaling cattle - can conceive, accept, join and make a massive business entity under the Amul brand and 'milk' prosperity, why not the transport brethren cutting across the swathe of mera Bharat feeding, clothing and sheltering 1.2 billion populace!

Another route is to get attached to the big boys and do business under their suzerainty. Hereagain, the headache of GST compliance work is someone else's. Not the less privileged fleet owner.

Shouting from roof tops by the lobby group to draw government's atteniton to redress tranpsorters' woes should - and would - continue, no doubt. Even the ruling elite can ill afford to ignore if the collective voice (milions, remember) hit the roof. Remember, state and General Elections are not too far away. Rulers are after all politicians seeking the comfort of vote banks and, not to be ignored is the unadulterated truth of transporters' perpetual funding of politicians at the MLA level. Target them where it hurts them the most.

That's it, for now!