Logistic Efficiency is paramount for profitable business operations. The 18-20% decrease in turnaround time for road transport sector post GST introduction are good omens for business operations. The same was confirmed in a recent study conducted by the rating agency ICRA. Participants in ICRA’s survey were 50 transport companies and 15 customer-oriented companies in India. The survey says Dismissal of inter-State check-posts contributed tremendously in increasing logistic efficiency.
Shamsher Dewan, Vice-President, ICRA, said, “In the long term, it is expected that the truck turnaround time will reduce and setting up of efficient warehouse network will improve the overall cost-efficiency”. However, a common concern that echoed in the report was for increased compliance burden post-GST. GST demands re-skilling of workers, technological upgrade as well as slaps penalties for misconduct. This requires a vigilant approach that increases compliance.
Read Also: Goods and Services Tax Impact on Logistics and Warehousing Sector
The ICRA report highlighted that the decision to do away with inter-State check-posts has been the prime contributor. The impact of the decision could be easily seen in states like Madhya Pradesh, Kerala, West Bengal, Bihar and Maharashtra. These states were known for the high waiting time. But the states slowly but surely are now getting rid of their notorious image.
Consolidated Warehouse
Efficient Warehouse Management is another important factor for prompt hassle-free business operations. The elimination of inter-State tax barriers post GST and e-WAY Bill implementation have increased tonnage and forced warehouse consolidation. But this is limited to small sectors only. The study revealed that FMCG and other related consumer durable sectors have decentralized warehouses which hamper fast consolidations. The nature of the consumer sector, where consumer demand is unpredictable, necessitates decentralized warehouses for on-time product availability as well as prompt customer service.
The study claims that more than half of the participant companies in the survey have completed warehouse consolidation. The remaining are in the process of consolidation, while some have
Hired services of supply chain management companies for setting up an efficient warehouse network.
However, limited product portfolio sectors like tile manufacturing have found the transition easy. The predictable nature of consumer demand in such sectors means that most of the businesses in such sectors have already consolidated their warehouses.
Importance of E Way Bill
E-Way Bill is now an important pillar of GST. Logistic Efficiency has benefited tremendously from it. More than half of the participants in the survey appreciated E-Way bill and digitization for reducing paperwork and in the process saving important operation time for transporters. The report added,”the overall impact of e-Way Bill has been positive. The full benefit of GST on the road logistics sector is expected to be realized over the longer term”
According to the reports, it is important to have a GST e way bill software for all the transportation and supplying of goods as it will help in compliance of registration, e way bill generation, bulk printing and much more. Gen GST software is considered to be the top rates GST software for the requirements of E Way Bill provisions.
