Nitin Gadkari, Road and Shipping Minister says, Indias logistics sector would gain the most from the goods and service tax as costs would fall by almost 20%.
Small traders with a turnover under INR20 Lakhs need not worry as they will not fall under the territory of GST, and those between INR20 Lakhs and INR75 Lakhs will have to only file a return.
Logistics players in the country maintained multiple warehouses from state to states in order to save on CST and state entry taxes levied by the government. These warehouses have been operating under their maximum capacity, which adds to operational inefficiencies. After GST launch various shortcomings of the sector are to be in the past a story as India becomes one single market where movement of goods across states is free.
This will bring about merging of warehouses across the country and mega logistic hubs could be formed, also huge investments in infrastructure could be seen, 100% FDI is permitted. As an effect of GST, various players in the warehousing and e-commerce sectors have started showing interest in the idea of setting up their warehouses at strategic locations which are well connected to their points of trade, this will also lead effectiveness. Information collected from the researched Logistics Industry Report published by BusinessEx.com.
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