GST Impact on Logistics Industry

Gst will be a boon for the industry as this single tax rate will change the face of the industry.As a nation will prosper so will this industry. India spend around 13-14% of its GDP on logistics and transportation which is more than countries like USA which spend around 8%of their GDP on their logistics.

This is because of improper infrastructure,number of increasing unorganized players,lack of proper tax regime  and many other reasons .The sector is  expected to boost by 2020 and  this growth will be  with provision of proper investment in infrastructure, implementation of GST. The uniform tax structure will increase operational Effectiveness in the industry and this will be a major reason for the growth .The emergence of organised sector,the top logistics companies in India will be the  key players  and dominate  and existing unorganized players will not be able to hold on.  All the operations  will be conducted in a streamlined way. The  logistics cost and time will reduce because of the following reasons:There will be less wait at the entry barriers ,no entry taxes will be charged  and because of less stoppage of vehicle diesel will be saved.  Logistics cost will reduce due to less stoppage and it will lead to  faster movement of trucks.

If we talk about warehousing,earlier companies need to maintain warehouse in each state to save entry taxes,because if they do not maintain warehouses in each state then for every shipping to that state they had to pay a hefty tax and now  with single tax rate …less number of  warehouses need to be maintained.Now there are fewer and larger warehouses maintained by companies which will be easier to manage.

Earlier different states had different taxes like octroi in Maharashtra, all these taxes will be not be charged after implementation of GST.
Now after the rule 5% service tax is implied on transporters.

To summarise,this revolutionary change  will make this industry more systemised and  this change  also bring down the cost and time involved  .This reform logistics industry will grow by leaps n bounds.

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