Impact Of GST On Logistics Industry
The logistics industry is currently undergoing some major transformation because of the taxes imposed on the industry. It is noticeable that express logistics is affected more than any other aspect of the industry. On the other hand, global medical logistics has also faced a lot of changes because of taxes.
According to experts on the logistics industry, there is a rise in the number of customers that chose to use companies that are offering faster and high-tech services. This is because they believe that technology helps in faster deliveries, transparency in the operations of the company, easier to comply with regulations, loads are transportedsafely and securely from one place to another and most of all the overall business operates better.
Because of GST, more opportunities have been presented to the logistics industry especially to companies offering express services. First and foremost, the addressable market of these companies has increased considerably in terms of size. We are at an era where the consumers want everything as soon as possible and on-demand. This is one of the most common features of today’s businesses – to be able to deliver what the customers want in the fastest way possible. Express logistics have a higher addressable market even in the B2B segment because of e-retail, e-commerce and omni-channel retail.
Before the GST was imposed, express logistics companies spend a large chunk of their capital in developing as well as maintaining their warehouse facilities which are present in almost every state because they want to avoid paying the value added taxes imposed on each state where they are operating. This is also their method of taking advantage of the changing demand in every parts of the country. With the introduction of a uniform GST rate, logistics companies are no longer forced to have as many locations.
Lastly, it is the goal of express logistics companies and global medical logistics companies to attract more investors. With GST, there is better ROC among companies therefore more investors are encourage to put in money for the industry players to be able to cash in with the profit derived from one of the most industries in the world.