Meaning of Impact of GST on logistics sector

What is Impact of GST on logistics sector


This post explains about Impact of GST on logistics sector.  

Logistics Costs

Logistics is defined as the management process for the movement of goods across country or across the globe. Companies map out the transportation path of their goods into a supply chain, or a path of transport that they use repeatedly to have goods shipped to them or to customers.

Impact of GST on logistics sector:

Back-of-the-envelope calculations say logistics costs would come down by at least 20%. Companies could do this with a hub-based warehouse system instead of having warehouses in all major consumer states. The checkposts at state borders have already been brought down. Karnataka, Andhra Pradesh and Tamil Nadu, along with 20 more states, have dismantled border checkposts, reducing hassles for trucks.

Several others are in the process (of doing so). The border checkposts have been removed even as states await electronic way bills, which will make truck movement easier. The e-way bill on GSTN (Goods and Services Tax Network) is expected to be introduced soon and will aid movement of trucks.

India is a growing economy and the high cost of logistics, currently at 14% of GDP, was having a negative effect. The average speed of freight transportation has been increased from the current 20-25 km per hour to 40 km per hour. Trucks that were earlier doing 200 km a day would do 400 km now.

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