India’s logistics sector to benefit from GST

India’s logistics sector would gain the most from the Goods and Services Tax (GST) as costs would fall by almost 20%. This was stated by Nitin Gadkari, Minister for Road Transport & Highways and Shipping. He has also said that logistics parks are being set up at various places across the country to act as freight aggregation and distribution hubs. These logistics parks will enable long haul freight movement between hubs on larger-sized trucks, rail and waterways. This will not only reduce freight transportation costs, but also throw open many employment opportunities and reduce pollution levels.
 
“Pre-GST, the statutory tax rate for most goods worked out to about 26.5%. Post-GST most goods are expected to be in the 18% tax range. India currently has very high logistics cost – about 14% of the total value of goods as against 6-8% in other major countries. GST will serve to bring down the logistics cost to about 10-12 % by facilitating efficient inter-state flow of goods and accelerating the demand for logistics services,” said a government release on Wednesday.