Goods and Services Tax (GST) is an indirect tax that is levied on supply of goods and services in India. In other words, it is a value added tax that has replaced all the indirect taxes applicable on goods and services by both central and state government. It has been implemented from 1st July 2017.
Benefits of GST:
With the effect of GST, there has been increased noticed in the efficiency and productivity to the Indian economy. It reduces the multiplicity of taxes which in return reduces paperwork and make the life of common man simpler. Now they do not have to pay multiple taxes
With the removal of cascading taxes, the result of GST over period lowers the tax burden. It provides a common market and help to achieve balance
Boost to Indian economy
The elimination of cascading tax proved to be of great benefit. The GDP growth increased by 0.9-1.7%. Also the successful implementation of GST helped in attracting new investments especially from global markets
Reduces the corruption
It is one of the great benefits to a taxpayer – elimination of multiplicity of taxation. The reduction in the number of taxation applicable in a chain of transaction helped to lower the paper work and overcome the problems generated by existing indirect taxation laws.
Impact of GST on Shipping Industry
MULTIPLICITY OF TAXES
The logistics industry in India had to maintain multiple warehouses across states to avoid various taxes. Most of the times, these warehouses were forced to operate below their capacity thus increasing their operating costs. With the implementation of GST, these restrictions on interstate movement of goods lowered and the shipping and logistics sector start merging warehouses across the country. Besides, this as an outcome of GST, operators of warehouse and people engaged in e-commerce have shown interest in setting up their warehouses at planned locations rather than every city on their delivery route. Reduction in unnecessary logistics costs increase profits for businesses involved in supply of goods through transportation.
INCREASE IN EFFICIENCY
Implementation of GST increases the productivity and efficiency in the shipping industry and the economy as a whole. According to various industry analysis, freight come down by 30-40 percent and logistics costs has been reduced by 20-30 per cent with the applicability of GST
COST / TIME SAVING:
Another advantage of GST on shipping industry is the reduction in entry taxes and heavy paper work at state check posts. Elimination of entry tax and easier taxpaying procedures resulted in easier movement of goods across the country.
The impact of GST to the shipping industry is similar as in other industries. It increases the pace of growth in the shipping industry. However these are just the expected results of it. GST and the Indian Shipping Industry may or may not prove friendly in the future. The proper and complete impact can only be seen within a course of time.