The effect of GST on warehousing and logistics
WAREHOUSING & LOGISTICS

The effect of GST on warehousing and logistics

Introducing the Goods and Services Tax (GST)in India has created a single integrated market with a uniform tax regime. How has the creation of a single market impacted the closely associated logistics and warehousing sector?...

Introducing the Goods and Services Tax (GST)in India has created a single integrated market with a uniform tax regime. How has the creation of a single market impacted the closely associated logistics and warehousing sector? “After the implementation of GST, we have witnessed significant growth in the manufacturing and e-commerce sectors as part of the Government’s ‘Make in India’ push,” says Rajesh Jaggi, Vice Chairman-Real Estate, The Everstone Group. “The consistent tax framework coming into place as a result of the GST rollout has helped raise India’s GDP and allowed for the faster and cheaper movement of goods and commodities across the country.” GST has allowed warehousing operators and owners to optimise inventory levels through centralised regional locations (hub) and reduced their operational/manpower footprint through investments in automation which is essential for managing big-scale facilities, continues Jaggi. “The development of the hub and spoke model has relieved companies from maintaining inventory in every state with large warehouses in major cities overseeing the whole inventory for a region.” Indeed, “after GST, the logistics and warehousing sector is consolidating and centralising its warehouse operations to achieve economies of scale and choosing to operate out of Grade A facilities that can integrate automation and digitisation to increase efficiency and incorporate sustainable elements,” observes Abhijit Malkani, CEO, ESR India. The changes in logistic operations with the advent of GST have led to an increase in opportunities for Grade A warehouses, agrees Jaggi. It’s not been all good, though. While consolidation has undeniable benefits, it also increases the dependence of the supply chain on a lesser number of warehouses than existed before, points out Vivek Rathi, Director – Research, Knight Frank India. “The pandemic exposed this limitation as the logistics operations of several companies were compromised with some of their warehousing locations and cargo transit corridors either being placed under lockdown or facing labour shortage.” Considering that a more dispersed warehousing network could have enabled companies to process orders despite closure of their primary warehouses, Knight Frank expects companies to factor in this disadvantage in their consolidation plans going forward.

Next Story
Infrastructure Urban

FIMI seeks urgent RoDTEP extension for aluminium exporters

"The Federation of Indian Mineral Industries (FIMI) has urged the Ministry of Commerce and Industry to extend the Remission of Duties or Taxes on Export Products (RoDTEP) Scheme for aluminium-producing units operating under Advance Authorisation (AA), Export Oriented Units (EOUs), and Special Economic Zones (SEZs).This appeal follows a similar request made by the Aluminium Association of India (AAI) to the Ministry of Finance, citing the need to safeguard the competitiveness of nearly 45 per cent of India’s aluminium exports originating from AA/EOU/SEZ units.In a letter to Commerce Secretary..

Next Story
Real Estate

Mumbai logs over 12,000 property deals in April; revenue nears Rs 9.9 bn

Mumbai (BMC limits) is set to clock over 12,142 property registrations in April 2025, contributing more than Rs 9.9 billion in state revenue, according to Knight Frank India. This marks the city’s strongest April performance in 13 years, registering a 4 per cent year-on-year rise in volumes. However, stamp duty revenue dipped by 6 per cent during the same period.Residential transactions continue to dominate, accounting for 80 per cent of total registrations. Notably, premium housing gained momentum, with the share of properties priced above Rs 2 crore rising from 22 per cent to 25 per cent, ..

Next Story
Real Estate

MHADA to issue redevelopment NOCs within 6 weeks: Jaiswal

In a major boost to Mumbai’s redevelopment momentum, Mr. Sanjeev Jaiswal, IAS, Vice President and CEO of MHADA, announced that No Objection Certificates (NOCs) for the redevelopment of old cessed buildings submitted under Section 79A(1a) or 79A(1b), along with 51 per cent resident consent, will be issued within six weeks. The directive, declared at MHADA’s 2nd Redevelopment Conference and Investors Summit, brings these approvals under the Right to Service Act. If delayed beyond the stipulated timeframe, the NOC will be deemed approved.The event, held at MIG Club, Bandra (East), brought tog..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?