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Impact of GST on the logistics industry in India
MBA( INTERNATIONAL BUSINESS) 2ND YR
DR. Ekta Rokade ABHILASH HALDKr
TABLE OF CONTENT
S.NO CONTENT PAGE NO.
2 REVIEW OF LITERATURE
3 RATIONAL OF THE STUDY
4 OBJETIVE OF THE STUDY
5 RESEARCH METHEDOLOGY
a NATURE OF THE STUDY
b STUDY AREA
6 TOOLS FOR DATA ANALYSIS
THE ARRIVAL OF GOODS AND SERVICES TAX
The Constitution Bill, 2011 amends the Constitution to give the central and state
governments the concurrent power to make laws on the taxation of goods and
services. The amendment allows for the introduction of a goods and services tax. If
Vat is a significant improvement over the local sales tax system, then the Goods
and Services Tax will be a major breakthrough towards a comprehensive indirect
tax reform in the country. Despite the success of VAT, there are still certain
shortcomings in the structure of VAT both at the Central and at the State level. The
GST at the Central and at the State level will thus give more relief to industry,
trade, agriculture and consumers through a more comprehensive and wider
coverage of input tax set-off and service tax setoff, inclusion of several taxes in the
GST and phasing out of CST.
What is the GST? GST is a comprehensive indirect tax on manufacture, sale and
consumption of goods and services at national level. The GST is expected to
replace all the indirect taxes in India. At the centre's level, GST will replace central
excise duty, service tax and customs duties. At the state level, the GST will replace
How will it work in India? The GST system is based on the same concept as
VAT. Here, set-off is available in respect of taxes paid in the previous level against
the GST charged at the time of sale. The GST model has some aspects which are
Components: GST will be divided into two components, namely, Central Goods
and Service Tax and State Goods and Service Tax.
Rate: Rates charged across all states and the central level will be uniform along
with the regulations, definitions and classifications
Applicability: GST will be applicable to all Goods and Services sold or provided
in India, except from the list of exempted goods which fall outside its purview.
Payment: GST will be charged and paid separately in case of Central and State
level. Input Tax credit: The facility of Input Tax Credit at Central level will only
be available in respect of Central Goods and Service tax. In other words, the ITC
of Central Goods and Service tax shall not be allowed as a set-off against State
Goods and Service tax and vice versa.
The Indian Logistics Sector has in recent times been in a transformationmode.
Against the backdrop of expansion in the economy, the logistics industry has
assumed a pivotal role in reducing costs by improving efficiency and increasing
competitiveness. The interplay of infrastructure, technological advancements and
newer types of services associated with this industry is likely to define how it is
going to help the customers in reducing costs with the provision of efficient
Interestingly, likely change in government taxation policies and regulation of
service providers would be the most important factors in the process of
development of the industry. That apart, growth of overall logistics network from
the perspective of trade would be essential in assisting Government of India’s
‘Make in India’ strategy.
In this paper, we tried to establish our views on the overall logistics sector
dynamics, location and cluster level analysis across top Indian cities while
estimating the impact of e-commerce on the industrial sector and effect of future
Government taxation changes on the sector.
Subsequently, we have treated logistics related properties as a separate and
individual asset class within the industrial realestate sector.sector.
The logistics industry in India was estimated to be worth USD 130 billion in 2013
and has been growing rapidly.While the logistics sector could be among the
primary bottlenecks in driving economic growth, it will also act as a catalyst to
realising India’s ‘manufacturing dream’ over the next decade.
REVIEW OF LITERATURE
Dr. R. Vasanthagopal(2011)2studied,“GST in India: A Big Leap in the Indirect
Taxation System” and concluded that switching to seamless GST from current
complicated indirect tax system in India will be a positive step in booming Indian
economy. Success ofGST will lead to its acceptanceby more than 130 countries
in world and a new preferred form of indirect tax system in Asia also.
Ehtisham Ahmed and Satya Poddar (2009)3 studied, “Goods and Service Tax
Reforms and Intergovernmental Considerationin India”and found that GST
introduction will provide simpler and transparent tax system with increase in
output and productivity of economy in India. But the benefits of GST are critically
dependent on rational design of GST.
Nitin Kumar (2014)6 studied, “Goods and Service Tax- A Way Forward”and
concluded that implementation of GST in India help in removing economic
distortion by current indirect tax system and expected to encourage unbiased tax
structure which is indifferent to geographical locations.
Monika Sehrawat, and UpasanaDhanda, “GST In India: A Key Tax
Reform” International Journal of Research – Granthaalayah: found that due
to dissilient environment of Indian economy, it is demand of time to implement
GST.Consumption and productions of goods and services is undoubtedly
increasing and because ofmultiplicity of taxes in current tax regime administration
complexities and compliance cost isalso accelerating. Thus, a simplify, user -
friendly and transparent tax system is required whichcan be fulfilled by
implementation of GST.
Nishita Gupta Assistant Professor ,UNIVERSITY OF DELHI “Goods And
Services Tax: IT’S Impact On Indian Economy : Concluded that tax policies
play an important role on the economy through their impact on both efficiency and
equity. A good tax system should keep in view issues of income distribution and,
at the same time, also endeavour to generate tax revenues to support government
expenditure on public services and infrastructure development. Cascading tax
revenues have differential impacts on firms in the economy with relatively high
burden on those not getting full offsets. This results in loss of income and welfare
of the affected economy.
OBJECTIVES OF THE STUDY
Objectives of the study:
stand how GST will work in Indian Logistic companies.
Identify the factor which affect the Logistic industry and its analysis.
over the current taxation system in India.
To evaluate the challenges of GST which Logistic industry have to face.
RATIONALE OF STUDY
The ambitious Goods and Services Tax (GST) would help the transportation sector
in improving its efficiency besides reducing the logistics cost. GST will help
transport sector in two areas - logistics cost will come down and two, efficiency
will increase both within India and exports. If GST is properly implemented, then
it will have a double positive impact on the industry. It has recommended
transporters to understand how the new tax regime would impact their businesses
and plan their future strategy accordingly. GST would help unify the market, lower
incentive to use tax system loopholes, widen tax base apart from improving the
productivity of the overall economy. Noting that medium and heavy commercial
vehicle (M&HCV) industry in the domestic market was very volatile, the size of
the industry was expected to reach 3.42 lakhs units by 2020 from the present 2.33
lakhs units. Majority of the growth will be due to the cargo segment which
accounts for 84 per cent of the M&HCV industry. The M&HCV market has put a
lot of pressure on bottom-line of the Original Equipment Manufacturers (OEMs).
"Therefore as the market revives the OEMs should move away from discounting
NATURE OF STUDY:
Being an explanatory research it is based on secondarydata of journals, articles,
newspapers and magazines. Considering the objectives of study descriptive type
research design is adopted to have more accuracy and rigorous analysis of research
study. The accessible secondarydata is intensively used for research study.
The study is limited to Indian logistic companies and dependent industry . Where
necessary will take the references of other countries taxation system .
Secondarysource of data will be used for my research like journals, articles,
newspapers and magazines.
TOOLS FOR DATA ANALYSIS:
Appropriate tools will be used for data analysis as per the need of the study.
Monika Sehrawat, and Upasana Dhanda(2015):, “GST In India: A Key Tax
Reform” International Journal of Research – Granthaalayah, Vol. 3, No. 12(2015):
The Empowered Committee Of State Finance Ministers (2009), First Discussion
Paper On Goodsand Services Tax In India, November 10, 2009.
Nishita Gupta[Year - 2014], Goods And Service Tax: It’s Impact On Indian
Economy, Volume 5 Issue 3
Juhi Khan (2016) _ LinkedIn, How can GST impact on Logistics Industry in India
Jones Lang LaSalle Property Consultants (India) (2015), Indian logistics - Taking
giant leaps forward.
Dr. R. Vasanthagopal (2011), “GST in India: A Big Leap in the Indirect Taxation
System”, International Journal of Trade, Economics and Finance, Vol. 2, No. 2,
EhtishamAhamad and Satya Poddar(2009), “Goodsand Service Tax Reforms and
Intergovernmental Consideration in India”, “Asia Research Center”,LSE, 2009.
Nitin Kumar (2014), “Goodsand Service Tax in India-A Way Forward”, “Global
Journal of Multidisciplinary Studies”, Vol 3, Issue6, May 2014.