The Monsoon session is on the way and most of the parties are optimistic for the bill and so as the investors. Most of the conditions are fulfilled by the ruling party and opposition is looking much satisfied as well. Except GST Bill, another 21 bills are lined up and this time, experts are expecting them to get clearance as well.
Logistics industry is projected to grow at a compounded annual growth rate of 15-20 percent between 2015-16 and 2019-20 that will get a further boost if GST is rolled out from this year, which can trim costs by 20 percent, says a report. The much-delayed GST rollout can help boost the GDP by 100-200 bps as this will help faster and cheaper movement of goods across the country with a uniform taxation structure, said a report by Care Ratings.
Since GST will be levied on goods transportation and full credit will be available on interstate transactions, logistic cost is expected to come down by 1.5-2 percent of sales due to warehouse optimization and the resultant lower inventory cost. According to a recent World Bank report, corporates can save up to 40 percent of their logistic costs incurred at check-posts and toll plazas. According to the report, the higher growth of the logistic industry will be driven by e-commerce, GST rollout, government focus on local manufacturing, the new national integrated logistic policy, and 100 percent FDI in warehouses, food storage facilities etc. But in spite of large potential, the industry remains entangled in complexities such as higher costs, a myriad of complex tax structures. The logistic sector is primarily divided into four segments -- transportation, warehousing, freight forwarding and value-added logistics. The transportation contributes the lion's chunk of 60 percent of the logistic pie, followed by warehousing compromising industrial and agricultural storage at 24.5 percent.