Page Contents
www.carajput.com;GST LAW
Cost reduction for manufacturers: Once GST is rolled out, there will be a common tax structure and thus, the burden of paying tax over tax will reduce.
Cost reduction for logistics players: Logistics players create a stock transfer between inventory stocking points within states to avoid this multi-tax scenario. They have a large number of smaller warehouses at various locations amounting to more than 50 small warehouses in some cases, which increases the overall cost of logistics.
Merger of smaller warehouses: Many of the smaller warehouses lack proper infrastructure and facilities. With a new tax structure, the focus would shift on efficiency rather than tax saving
Development of new technologies: The current scenario prevented use of new technologies as the cost structures in place resulted in margins of less than 5% on a turnover of few million rupees.With implementation of GST, smaller warehouses will re-align/ merge into more productive and logical locations.
Increase in transportation lot size:With the development of bigger warehouses, the transportation lot size will increase. This will reduce the cost and time taken in transportation of goods.
Hub & spoke system: Organizers will now be able to explore a different distribution model such as setting up mother warehouse and regional distribution hubs, which will be away from the traditional carrying and forwarding (C&F) distributor-based models currently adopted.
Increase in cash flow: The new regime could increase the profit after tax of logistics players, thus giving them a better cash flow.
Reduction in transit time: The introduction of GST will reduce transit time taken for border crossings and paper work.
Increase in organized warehousing sector: As a result of the GST, there will a reduction in unorganized warehousing. Price charged by the organized sector will reduce the price advantage that unorganized sector presently enjoys.
Also read : GST Impact on Import and Export
Also Read : GST Impact on Real Estate
Goods and Services Tax (GST) is applicable to all businesses with Revenue/Turnover > 20 lakhs
GST replaces a bunch of taxes. It subsumes a majority of indirect taxes like excise, sales, VAT services levies.
Also read : Effect of GST on Advertisement and Cinema Industry
Overall, because GST is a single tax that encompasses numerous existing taxes such as excise, VAT, service taxes, state taxes and levies, and so on, it would simplify tax processes and make doing business easier.
Hope the information will assist you in your Professional endeavors. For query or help, contact: singh@carajput.com or call at 9555555480
New cheque clearing process in India starting from October 4, 2025 Existing System (Until Oct 3, 2025) : Clearing Method:… Read More
Overview on Tax Treatment on Gratuity in India What is Gratuity? Gratuity is a lump sum paid by an employer… Read More
Taxation Comparison: Gold Coin vs Gold Jewellery Tax Aspect Gold Coin Gold Jewellery ITR Reporting Treated as a capital asset.… Read More
Crypto Taxation & ITR Reporting Guide Tax on Profits from Crypto (Virtual Digital Assets)- Taxation U/s 115BBH Applicability on Virtual… Read More
Savings Account – Rules for Transactions to Avoid Income Tax Scrutiny The Income Tax Department monitors high-value transactions through banks’… Read More
Quick Guide on GST Marginal Scheme What is GST Marginal Scheme Meaning : The GST Margin Scheme is applicable primarily… Read More