Implementation of GST is a game-changer

Read IIM U Director Prof. Janat Shah’s take on the GST implementation. Head over to this link on the Economic Times Blog

Implementation of GST is a game-changer

Excerpts:

Studies indicate that about 60% of freight movement within the country is by road. Close to 60% of the travel time is spent at various checkpoints.Long lead times make demand forecasts inaccurate and planning difficult. The implementation of the goods and services tax (GST) is, thus, a game-changer. It is expected to set right the aberrations in Indian supply chains and contribute to India’s economic growth, better integrate its market as well as firm up campaigns like ‘Make in India’.

The GST Bill proposes an additional tax not exceeding 1% on interstate supply of goods. Industry has expressed some reservation as this levy is cascading and would encourage firms to set up warehouses in all states irrespective of the trade volume.

Too many points in the supply chain results in unnecessary loading and unloading activities. In addition, it could also distort supply chains. A retailer, say, at Hosur in Tamil Nadu would then be supplied from the Chennai warehouse rather than from the nearby Bengaluru one.

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