New Delhi, August 19 (KNN) The transportation sector is likely boost under the newly implemented Goods and Services Tax (GST), however despite the rise in the sector, the profit margin of the operators is likely to shrink, a study revealed.

According to the study conducted by Redington India, IT –related logistics solution provider, with  the new tax regime, the transportation sector can expect a better opportunity in scaling up their businesses. The prime reason for the boost would be as under GST, the concept of Full Truck Load (FTL) will now shift to the smaller cargos giving in space for newer fleets.

The study however maintained that despite the sector experiencing better scope of business, the profit margin is likely to shrink.

The study further revealed that because of the removal of the multiple check posts that used to exist under the previous tax regime, the routes are likely to ease, resulting in a reduction of 20-40 per cent in the covering of a distance.

The study observed that GST will help the sector have a level playing field as there would be less of disruption that used to happen due to various reasons along the routes.

Though the initial phase since implementation seemed worrisome for the sector, the condition is likely to get better eventually, the study added. (KNN/ DA)