Impact of Tax Structure on Regional Logistics Supply Chain: Case of GST in India
The logistic sector in India remains entangled in several complexities which primarily include higher logistic costs and complex tax structure. Till 2017 each of India’s 29 states taxed goods that moved across their borders at various rates. As a result, freight that moved across the country was taxed multiple times and often with duplicate taxes. Further, warehouse operators and e-commerce chains in India were maintaining multiple warehouses across states to avoid CST levy and state entry taxes i.e states offering tax-friendly incentives were preferred for setting up of logistic infrastructure, and in the process values of goods varied across states. Moreover, this had often led to warehouses operating below their capacity and thus adding to their operational inefficiencies
