A Full-Service 3PL Company ready to handle all your needs.
GST Impact on Logistic Sector
With the introduction of the Goods and Services Tax (GST) from July 1, 2017, inter-state transportation of goods would become more efficient. And among all, the logistics sector, comprising inbound and outbound segments of manufacturing and services supply chains, is likely to get the much-needed boost. Logistics companies in India are moving from traditional setups towards integration of IT and technology and this is expected to reduce the costs incurred and meet service demands.
At the same time, use of technology would facilitate efficient tax administration for registration, the filing of returns, data exchange and efficient investigation, supervising, auditing and performance analysis. The implementation of GST from July 1, 2017, would not only allow logistics companies to set up just a few and big warehouses region wise, but also allow them to follow the hub-and-spoke model for freight movement from the warehouses to different manufacturing plants and wholesale and retail outlets.
The government’s “Make in India” kitty initiative is expected to boost the manufacturing sector to 10 per cent growth. To note, export/import (EXIM) cargo, agriculture and manufacturing especially, textiles, auto and auto ancillary have been identified as traditional growth drivers to demand warehouse space in India. Besides logistic companies, the e-commerce sector, tech start-ups and FMCG companies are also likely to benefit.
Recently, the Central Board of Excise and Customs has put out a proposal on the e-way bill, as a part of easing interstate traffic movement under the GST regime; the ground-breaking reform in the Indian economy. It is expected that this remarkable initiative would enable standardisation of processes and bring more transparency in the system. With the shift in Indian logistics industry from unorganised to organised format, coupled with growth in consumer industries and increasing dispersal in demand, we may see investment opportunities in the areas such as road transportation, railways, multimodal logistics parks, online retail logistics and value-added services.
Seeing this much-awaited opportunity in the Indian logistic industry, Lot of foreign multinational logistics companies are looking for a joint venture with logistics majors for establishing multimodal logistic parks in India.
Besides the logistic sector, GST implementation will also create a true unified national market in India and this is expected to make Indian economy more efficient and prosperous
Related posts
