Analysis of the Impact of GST on Logistics and Supply Chain Management

This report analyzes the impact of the Goods and Services Tax (GST) implementation in India on the logistics sector, focusing on its effects on third-party logistics providers, e-commerce companies like Amazon, and overall supply chain management. It explores the criteria for selecting third-party logistics service providers after GST implementation, highlighting the importance of cultural alignment, IT capabilities, and value-added services. The report examines how GST has influenced the logistics sector by affecting infrastructure, warehousing, and tax regulations. It also discusses the impact on extra services provided to customers, the changes in costs associated with logistics operations, and the benefits of a single tax system in streamlining processes and reducing costs. The report concludes that GST is likely to have a positive impact on the 3PL and warehousing sectors, leading to increased efficiency and cost savings.

Running head: IMPACT OF GST IN LOGISTICS
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Running head: IMPACT OF GST IN LOGISTICS
Table of Contents
1. Is there any specific extra service your company usually asks of the logistics provider?...........2
2. What are your company’s criteria for selecting third party logistics service providers as its
customers after the implementation of the Goods and service tax in India?...................................2
3. After the implementation of the GST in India what effects have you seen in the third party
logistics sector?................................................................................................................................3
4. Is there any impact on the extra services provided by the company to the customers?..............3
5. Is the cost coming up or down by the implementation of the GST?...........................................4
Reference.........................................................................................................................................5

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Running head: IMPACT OF GST IN LOGISTICS
1. Is there any specific extra service your company usually asks of the logistics provider?
Amazon is e retail, which, operates on the online platform, hires a third party company,
which provides a shipping of the products of that the company sell through its Platform. Amazon
is a global competitor and it dominates its suppliers as well as keeps a viable relationship to go
on. To keep its customer happy and satisfied the company asks its supplier service to use an
attractive packaging. In addition not just dropping the parcel delivery in the door, they go with
the package to deliver to the confirming person’s identity. This is a different from other logistics
service giving company. They are also courteous in behaviour to handle customer grievance on
face to face as given training on the department before recruiting. In addition, Amazon contains
the high standard shipping service for their customer (Zhang & Zhao,2012).
2. What are your company’s criteria for selecting third party logistics service providers as
its customers after the implementation of the Goods and service tax in India?
The biggest challenge in shipping is to get the culture alignment with the logistics
shipment company with the parent company keeping in mind the lead times, landing costs,
inventory carrying costs. Another is the company infrastructure of the 3PL company and
determining the accessibility to shipment data. The IT capabilities and handling real-time data
and responsiveness of the supply chain also needs to be kept in mind. The ease of doing business
with the partner, the relationship with the supplier and importance of participation is also a
criterion to do business (Zhang & Zhao,2012). The value-addition in customer service is also
criteria to follow through selecting a third party logistics provider.

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Running head: IMPACT OF GST IN LOGISTICS
3. After the implementation of the GST in India what effects have you seen in the third
party logistics sector?
Before the implementation of GST in India, there was different tax not under the same
central government regulations. GST has influences every sector in the economy but Logistics
sector is one of the most important sector that has been affected. First, the whole infrastructure
will be affected being able to pay tax digitally. The networking between the different warehouses
needs to be co-ordinated. The logistics sector was a fragmented sector in the transportation
sector. The tax credits will push companies to develop its own sectored supply chain
management or tying up with the third party logistics sector (Zhang, 2013). The tax rate
reduction of 200-250 base points will also ensure the lowering the prices of goods and services.
4. Is there any impact on the extra services provided by the company to the customers?
There have been a good impact of having GST implemented and that has also directly or
indirectly has been affecting the service that a customer gets from the company. There have been
many response and feedback that the company gets regarding delivery time extending
(Schönsleben, 2016). After GST, there has been response that is quick and reliable. The response
report has recorded smaller lead-time. Fixing the mistake where the customer is concerned
Amazon always thinks of the delivery option to be smooth among their customers. Not only
short-term relationship building but also the long-term method they also think of the importance
of providing excellent service (Lai & Wong, 2012). The value addition service has a separate
cost involved in business and that does needs investments. The money saved from the different
intermediate tax expense will add to the benefit of the organisation expansion.

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Running head: IMPACT OF GST IN LOGISTICS
5. Is the cost coming up or down by the implementation of the GST?
The single tax will remove all the cascading effect of different tax system. The Central
GST will eliminate the Additional Excise duty, services tax, countervailing duty, entertainment
tax, central sales tax, purchase tax, luxury tax, Octroi and Entry tax and other taxes will be
subsumed. GST has good and bad both influences in different industry. The warehouses in the
area, which will be getting in the idle list for the GST process, are in the smaller cities and
suburbs of India. These are expected to be put to residential use. The gathering of the products
warehousing sector will lead to cost efficiency of labour, transportation and real estate sector
costs will reduce. The cost benefit analysis of the company in logistics sector has shown
increment in tax saving field. The single CGST and SGST is shown among the balance sheet and
shown a drastic change in the tax savings increment. The input tax credits in the sector have
increased due to GST. The transparency in the credit system has provided relief to the people in
the company (Dekker et al., 2013). The analysts in the sector have provided the growth of 21.6%
in the recent years and are optimised about the positive impact after 1st of July. The intermediate
tax credits will be subsumed by the CGST. The importance of warehousing consolidation in an
e-commerce company is very essential for the sector therefore; this consolidation will ensure the
cost efficiency among the transportation cost. It can be concluded safely that GST will have a
positive impact on the 3Party Logistics services or the warehousing sector in India.

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Running head: IMPACT OF GST IN LOGISTICS
Reference
Dekker, R., Fleischmann, M., Inderfurth, K., & van Wassenhove, L. N. (Eds.). (2013). Reverse
logistics: quantitative models for closed-loop supply chains. Springer Science & Business
Media.
Lai, K. H., & Wong, C. W. (2012). Green logistics management and performance: Some
empirical evidence from Chinese manufacturing exporters. Omega, 40(3), 267-282.
Schönsleben, P. (2016). Integral logistics management: operations and supply chain
management within and across companies. CRC Press.
Zhang, G., & Zhao, Z. (2012). Green packaging management of logistics enterprises. Physics
Procedia, 24, 900-905.
Zhang, X., Zhang, Z., Zhang, Y., Wei, D., & Deng, Y. (2013). Route selection for emergency
logistics management: A bio-inspired algorithm. Safety science, 54, 87-91.