GST brings opportunities for logistics firms

Published By Avalara India, 18 Sep 2017



GST brings opportunities for logistics firms

Logistics means the movement of goods from point of origin to point of consumption in order to meet a customer’s requirements. It is the most important part of supply chain management and ensures the right movement in the right direction at the right time. Goods often move from one state to another, and sometimes pass through several states.


Situation of Indian logistics industry


Transportation makes up about 60% of the logistics industry, while warehousing, freight forwarding, and value-added logistics make up the remaining 40%. The Indian logistic industry, at present, is unorganized and underdeveloped.


With the implementation of GST and other reform initiatives of the central government, such as 100% FDI in warehouses and the ‘Make in India’ initiative to promote manufacturing in the country, the Indian logistics industry is expected to grow at a higher rate in next few years.


Taxability under VAT vis-à-vis GST


Different states charge VAT at different rates according to different classifications of goods in different schedules of different VAT laws. When goods enter a particular state, the respective state law authorities examine the goods, classify them according to VAT schedules, charge entry tax or octroi, and then allow entrance of the goods. A lot of time is wasted in transit, and transportation costs increase. Also, the freight is taxed several times, increasing the overall cost.


GST, which has been tagged as the “Game Changer of India in the 21st century,” will make the entire country ONE MARKET, wherein goods can freely move from one state to another without any hindrance of entry checks. The same tax rates will be charged on all products and services throughout the country, irrespective of the state where goods were manufactured or the delivery destination.


Previously, there was conflict about whether to charge VAT or.....


Read more at : https://www.avalara.com/in/2017/09/11/gst-brings-opportunities-logistics-firms/?
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https://www.avalara.com/in/products/gst-returns-filing.