"HORN OK GST"

                              

                    With the most comprehensive and unified indirect tax in the country, most industries are likely  to benefit as it simplifies taxation and diminishes the role of bureaucrats. The supply chain and logistics or more importantly the transport industry is the one that will be impacted thoroughly if it survives the system. The transport industry is one of the most essential and also the most unorganized industries. Right from the invention of wheels which was around 3500 BC, anything and everything can be transported which paved ways for multiple parties to play important supporting roles in it.  Food grains from farmlands to the cities, a simple letter from urban to a rural area and then the world started transporting oil which fueled the engines of the transport industry like never before. It created responsibilities, it created jobs and then it created corruption. The supply chain eventually became complex, less efficient with no proper records and operated in losses.    

                  Transport of goods between the states  included a complex tax structure which was time-consuming and left loopholes for minting money. Goods needed to be cleared at major check posts and the inter-state taxes had to be verified which led to delays. Some of the goods that could not fit in any said category by a particular state could remain idle creating further delays.The transport industry is the binding system which needs to operate at the highest efficiency leaving no room for numerous validations but with the current taxation, the entire logistics industry remained caught up in the regulations and compliances.

With the GST, there is lesser strain to expand geometrically which means that warehouses can be set up closer to the manufacturer even if it does not exist near the customer. As against the earlier method of setting up multiple warehouses, there will be major warehouses at a larger distance from each other. For instance, a warehouse in Delhi would supply in the north, a warehouse in Pune and Chennai would supply in the West and South respectively. The loads would be carried as full truck loads to enter into another state with no tedious taxation until it reaches another major warehouse  followed by Part Truck loads to reach the customers. With the trimming of idle time and transit time because of GST which directly curtails the taxes on vehicles, goods tax levied exclusively in different states for different goods;  the entire chain from the manufacturers to the customers is optimized. However, it does not eliminate the transport of Part truck loads which presents numerous other challenges. The GST is optimizing one aspect of the supply chain, it is creating a healthy competition for the major supply chain players but is the picture as rosy at the distributors end remains to be studied.

Your opinions and counter arguments are more than welcome!

Ghatge Patil Transports Private Limited