Will the GST turn India into Asia’s next logistics powerhouse?


India’s parliament has passed the Goods and Services Tax (GST) bill, which aims to reduce India’s complex tax system down to a single rate, reducing costs significantly for shipping goods across state borders.

At present taxes vary from state to state and foster protectionism, but the simplification of the system will remove taxes at domestic state borders, and replace them with single rate that will apply to most goods. Estimates suggest that India’s logistics sector, which accounts for nearly 14% of the country’s GDP, could see savings to the tune of $200bn annually.

Implementation of these tax reforms may have a major knock-on effect for Indian supply chains, and may usher in centralised distribution strategies for larger entities. The present system encourages smaller warehouses to be located in each state in order to avoid inter-state taxes, certainly sub-optimal in terms of operational efficiency. The introduction of GST should lead to fewer but larger warehouses, encouraging the development of modern facilities and reducing the share of the unorganised sector.

Source: Transport Intelligence

Ti would like to invite you to take part in the Global Warehousing & Logistics Networks 2016 survey. The survey will take no longer than 2 minutes to complete and all answers will remain anonymous. All participants will be provided with a FREE copy of the Influential Technology Trends 2016 whitepaper written by technology expert Ken Lyon.

Start survey

All the results will be used as part of the new Ti report Global Warehousing & Logistics Networks 2016 due to be published September 2016 – if you would like to register your interest and receive a 20% discount off the report please click the link below and you will be added to our priority list:

Register my interest

GSCi

The world's largest collection of global supply chain intelligence

  • quickly and easily search and gain invaluable insight into the logistics industry
  • Empower everyone from business development executives to CEO level
  • Enhance the role of the market research department