At the current time, Logistics is regarded as one of the delicate sector that gets the benefit by the implementation of the GST. When it was not implemented, most of the logistic companies were waiting for the GST to come. Before this, the taxation structure was very complicated and this sector faces most of it. The 29 states have different magnitude of taxed for the goods when they moved across the borders. With the introduction of GST, the previous taxation structure dissolved well and creates a unified structure for different states. Thereof, the tax rate has dimensionally decreases to 19-21%. From then, the reduction of 6% in taxes definitely brings a big change in the market.
No doubt, GST is creating a bridge between customers and merchants. It brings a dramatic reduction of 20% in the logistic companies. After the GST comes into action, the government needs to protect the interests of all stakeholders.
Let’s talk about structural re-engineering
GST has the capability to eradicate the process bottlenecks. According to the recent studies, to avoid any kind of interstate taxes, most of the logistic companies developed the warehouses near the manufacturing facilities. As the GST implemented, these companies can build their warehouses at the most suitable locations without thinking about the multiple taxes. It has been clear that government has allowed 100% FDI in warehousing.
Enlightening the trucking business
This comes out as a major blind spot as it is most unorganized and fragmented one. Truly speaking, it has not changed much with the passing time. Also, the local businesses are totally dependent on the nearby transporter despite of the poor transportation quality and insufficiencies.
By this, GST has obtained critical acclaim worldwide. This is not for the first time that GST is implementing n any country. There are about 160 countries that already have GST ruling over there. We all can see a drastic change in the India’s economy with the naked eyes. It has been found that the average rate of GST generally ranges in between 15-20%.
On comparing with other companies, it can clearly be seen the existence of the insufficiency in the costs and core that is always on higher side. Therefore, the GST becomes the need of an hour for most of the logistic companies.
Better the logistic companies, better the nation
The ‘Make In India’ project along with the GST is a great combination for India when it comes to unifying the tax structure of the nation. It is very clear now that the logistics plays the most important part in the nation’s development for the betterment. Unquestionably, the taxation regime has simplified in many ways and proven to be a great reboot for the logistic companies. With the exception of this, GST become an efficient way of reorganizing the supply chain according to the business needs.
GST has become the democratic culture of India and improves the business practice over here. It is for sure now that the implementation of GST is the result of long thinking and result that make the India one of the leading countries.