GST will transform Logistics and Transport Sector in 2017, words from Industry Experts


The Logistics Headlines, New Delhi 07th Feb 2017 : Indian logistics market has a great potential for growth in emerging economies in 2017, as per a popular survey, and with implementation of Goods and Services Tax (GST), the nation is sure to become a powerful investment destination. GST is fondly named as “Darling” in Indian context.  The Finance Minister, Arun Jaitley in his announcement of Union Budget 2017-18 laid out provisions for logistics and port sector, along with plans to develop 2,000-km coastal roads.

The details regarding GST roadmap have not yet been shared. It was only the IT systems designed for GST rollout that was presented, but the budget could not throw light on connections between budgetary provisions and GST.

Growing Anticipation for Goods and Service Taxes in India

If GST is implemented soon, the logistics sector will witness new businesses and better connectivity between the manufacturing facilities and ports. The Government must share the goods and services taxes plan with the public soon to ease the logistics business. There national highways will also receive high allocation of funds with GST.

The Vice-chairman of Patel Roadways, Arif Patel said that if GST is not properly implemented then the logistics sector may suffer, while Dr.Manoj Singh, (IRTS) as Adviser (Transport), NITI Aayog, was confident about the GST rollout.

Though the budget had supreme programs for agriculture and rural infrastructure, the need for goods and services tax introduction is much anticipated to spur logistics industry growth in both rural and urban levels.

Why the Existing Interstate Tax Regime is Stagnant?

The interstate taxation system forces companies to maintain and create warehouse in every state because of which the supply chain becomes longer and inefficient. Thus, 50 to 60 percent of time the logistics industry spends on complying with tax, tracking the same, and going through the check-points.

GST will move on to simplify the taxation procedure, making the system transparent and less bureaucratic.  Transport and logistics sector will benefit the most with goods and services tax, as it will cut out the state taxation system, which is cumbersome.

What would be the Advantages of Goods and Services Tax?

The industry is expecting the GST Bill to transform the transport and infrastructure scenario with giant leaps, eliminating the time wasted in obligations & other regulations. Some of the advantages that will take effect with GST going live for transport sector and country’s economy are:

  • Optimal warehousing structure with faster turnaround time.
  • Dismantling of inter-state check post will result less idle hours and greater up-time for trucks.
  • It will also add 2 percent to the nation’s annual GDP growth.

How is the Logistics Sector Preparing for GST?

With the decision of demonetization, which came in effect in November 2016, a lot many industries, including logistics were hit as it is believed to be one of the highest consumers in cash-based economy. Many a times, consumer blocked out logistics services on the pretext of annual clearance or rest, but the fact was everyone were silent studying effects of demonetization and trying to emerge out of it.

Once GST will be underway, the companies will have to pull its socks to adjust with this new tax regimen so that they can build stronger platforms for enjoying its profit. After goods and services tax, quick billing will be necessary for customers so they can grab the GST input credit.



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