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1. GST Has Transformed The
Logistics Industry. How?
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2. GST (Goods and Services Tax) is another big thing that implemented in India right
after demonetization. It is one of the greatest improvements in Indian history. It is a
major initiative taken by the Indian government for infrastructural development and
economic growth of the nation, ensuring a suitable environment for the businesses
offering goods transport services in the industry. All the comprehensive indirect tax
imposed on production, sales, and consumption of goods and services has been
combined in a single Value-Added Tax that is Goods and Service Tax (GST).
The sudden increase in the GST, despite getting a bad impression from some, it
actually changed the Indian economy in a much better manner. Over time, it was
realized that this was compulsory and it aided in establishing different logistics and
transport industries to streamline their overall processes.
From the movement of vehicles to handling a good economic supply chain, GST has
affected the logistics operations amazingly. Several case studies have been
performed and it was noticed that there was a reduction of 20 % in turnaround time
of trucks after dismantling at the border.
Impact of GST on Logistics and Warehousing
Among all the sectors, the warehousing and logistics industry has been recognized as
the beneficiaries of the new tax rule implementation. Truck transport service
providers realize that the warehousing sector plays a major role in the economic
growth in India. Actually, it proved to be a catalyst in realizing the dream for the
Indian manufacturing industry and is also an initiative towards the ‘Make in India’
scheme.
Logistics and warehousing have been a major part of any business. The following are
some of the most important ways GST can aid in warehousing, logistics and
manufacturing sectors.
➢ Decreased Production Cost
GST, the new taxation rule has significantly boosted the consumption of goods as the
manufacturing cost and profit share has been reduced. The goods cost shall now be
affordable to the consumers as there are no loopholes and hidden taxes. When you
are doing freight booking online, all the expenses in the production, transportation,
warehousing, distribution and sales are now traceable.
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3. ➢ Modification in Supply Chain Management
The most crucial opportunity in the logistics sector is the major expansion of the sales
realm across the nation. The new tax rule will allow a flexible sales chain that won’t
only overpower the different taxes, alleviating the dropping impact of these taxes,
but, it will also eradicate inter-state check-posts or barriers. It will ensure the safe,
quick, smooth and credit-free transportation process.
➢ Reduced Shipping Time
The companies engaged in offering transport services in Vadodara and other logistics
companies used to face a lot of hassles which reduced the efficiency of the logistics.
The road which is considered as one of the most preferred modes for transportation
has experienced a minimized transit time. The regulatory impairments and transit
delays have greatly decreased and other organizational issues have also significantly
reduced. The implementation of a GST in the logistics market has improved the
efficiency of service providers.
➢ Bulk Handling with Efficiency
The manufacturing firms can now indulge in bulk productions inputs and outputs. The
advancement in warehousing enables the organized and efficient stock storage as the
warehousing and logistics sector are implementing advanced and efficient practices
such as cross-docking and bulk-breaking.
With the new taxation policies, the manufacturing industries would rather be
encouraged to develop their own warehouses or outsource to third-party warehouses.
Online truck booking and logistics companies can re-design hi-tech warehouses that
can ease manufacturing industries.
➢ Encouraged e-invoicing
With the evolution of this combined tax rule, there has been a significant boost in e-
invoicing and reduction in the paperwork. Before the GST, a lot of trucks were
stopped at check-points because of pending or incomplete paperwork. Now with a
single document (e-invoice) available, it has become easier for logistics carriers and
truck transport service providers to process deliveries much faster.
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4. There has also been an alliance of small stock transfer storage houses that decrease
the overall warehouse maintenance cost. It also boosted the GDP and necessitated a
new agreement that was much needed for the logistics sector and e-commerce
sector.
➢ Improved Buyer and Seller Trust
With the implementation of GST, goods transport services providers in the logistics
industry have started exploring new advancements for their supply chain processes
and helped in creating a better consumer-seller relationship.
➢ Logistics and e-commerce Agencies
The integration of the multilayer tax on goods and services turned the Indian tax
system into a combined one and improved the way of conducting business. The GST
has reduced the overall transportation tax and aided in improving various logistics
decisions. With this, not only logistics move forward but also, helped the logistics
sector to reach its potential in terms of quality and growth.
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