The document discusses the impact of the proposed Goods and Services Tax (GST) in India on logistics costs and the logistics industry. It states that GST will help companies reduce logistics costs by 1.5-2.5% by enabling larger warehouses, adoption of hub-and-spoke models, and greater economies of scale for transport operators. This will lead to structural changes like fewer but larger warehouses as India becomes a single market, larger trucks on the road, and more outsourcing of logistics operations. Specific benefits mentioned include reduced storage costs by avoiding taxes when moving goods between states, expected growth for container logistics companies, and potential 60% increase in average daily truck distance.
Francesco d’Angela, Service Designer di @HintoGroup- “Oltre la Frontiera Crea...
GST Impact on Logistics
1. GROUP MEMBER’S NAME ROLL NUMBER
Akarsh Singh 201601323
Ashish Chaudhary 201601347
Kaustav Sen 201601341
Simranjeet Singh 201601335
Shashank Sharma 201601329
2. The Goods and Services Tax(GST) is a value added tax that will
replace all the indirect taxes levied on goods and services by the
government,both central and states.
The basic idea of this bill is to create a single, cooperative and
undivided Indian market to make the economy stronger and
powerful.
6. One function of logistics
marketing is finding out who
your customer is and how to
get the product or service to
the customer
An organization bases pricing
decisions on both internal and
external factors. Marketing logistics
must recognize price drivers. The
profile of the customer, the product
and the type of order are factors
that drive the price.
Promotion is another important
aspect of an organization’s
marketing logistics process. When
bringing a product to market, the
organization must coordinate the
logistics of the various marketing
materials.
The function of place in
marketing logistics allows the
organization to simplify the
transactions between a logistics
provider and the customer.
7.
8.
9. The proposed goods and services tax (GST) will help
companies reduce logistics cost by 1.5 to 2.5% as they
reconfigure their supply chains and bring in three key
structural changes to the logistics industry.
India becomes one big
market, there will be
fewer and larger
warehouses It will lead to a larger
number of bigger trucks
on road as there is
greater adoption of the
hub-and-spoke model
These changes will
lead to greater
economies of scale for
transport operators
and lead to more
companies
outsourcing their
logistics operations.
10. Warehousing gains, valuation hurdles:
Currently, goods incur 2 per cent central sales tax (CST) when they
are manufactured in one State and sold in another. To avoid this,
industries transfer the manufactured goods to warehouses in the
State from where the sale of goods takes place. This helps them
avoid CST while simultaneously availing the input credit that can
be obtained through value-added tax. But this makes them incur
extra storage costs.
11. Containerisation –
Major domestic freight players like AllCargo Logistics, Navkar
Corporation and Container Corporation of India are expected to have a
positive impact from GST implementation. Over the last three years,
twenty-foot equivalent container volumes for Allcargo Logistics and
Navkar Corporation grew by 17 and 12 per cent respectively.
12. Transit time reduction
Trucks in India currently travel an average of about 280 km
per day in comparison to those in the US which travel 800 km
per day. The report on revenue neutral rate indicates that
implementation of GST can add an additional 164 km truck
distance per day, which is close to 60 per cent increase from
the present day scenario.