New Delhi: The Goods and Services Tax (GST) will benefit logistics firms and result in lowering the product prices by up to 10 per cent, integrated supply chain solutions provider TCI said on Thursday.
The indirect tax regime will also incentivise logistics firms to invest more in assets and technology, Transport Corporation of India (TCI) said.
The government has expressed hope that the GST Bill, which is held up in the Rajya Sabha, will be passed in the upcoming Budget session of Parliament.
“The GST will benefit companies operating in the supply- chain business. This shall make logistics firms more efficient besides reducing their actual requirement for commercial vehicles and will help in lowering product prices by approximately 10 per cent,” TCI Managing Director Vineet Agarwal said.
Agarwal said the current trade boundaries between states will cease to exist in theory and companies can consolidate their supply chains, resulting in a seamless supply across the country.
“GST will also catalyse investments in IT to help in avoiding delay and detention of trucks, which in turn will not only ensure fast delivery of goods, but will also catalyse the industry towards better fleet utilisation…which translates into revenue and not overheads,” Agarwal said.
This will significantly reduce the vertical imbalance between the Centre and states by enhancing the tax base of the states, he said.
Also, the implementation of GST in conjunction with states will promote the development of logistics parks, and free-trade warehousing zones will speed up formation of regional hub-based infrastructure and an environment conducive for rationalisation of the logistics network, he said.
“This in turn will incentivise logistics companies to invest in assets and technology to align their service offering to complement the supply chains of their customers,” Agarwal added.
TCI claims that with its expertise, customer centric approach and extensive infrastructure, it moves 2.5 per cent of India’s GDP by value.