Impact Of GST Rate Changes On The Logistic Sector

The 56^th GST Council meeting held on 3^rd September 2025 introduced a series of rate rationalisations affecting the logistics sector. With the 12% and 28% GST rate slabs going away, there has been an impact on not only transportation services (public transportation and transportation of goods, where the earlier optional rate of 12% with ITC has moved to 18% with ITC), but has also impacted vehicle taxation, which will not only reduce procurement cost but also help offer services at better rates for transportation / rental services and provide flexibility in business models. The revised rates will come into effect from 22^nd September 2025.

Impact on logistics sector:

• Significant cost savings on purchases: Reduction in GST rate on purchase of trucks for goods transportation and buses, motor vehicles for passenger transportation will significantly reduce the upfront investment required on purchase. There will be a 10% savings on upfront cost (in case ITC is not