New India tax will mean savings say experts

DELHI: July 21, 2017. The implementation of a new Goods and Services tax (GST) in India, as a replacement for a myriad of local and state levies, has prompted warehouse BtB marketplace Log-hub and supply chain analytics company 3SC to offer supply chain cost-savings under the new tax regime.

Log-hub is a Swiss logistics company led by former Cargolux CEO Dirk Reich. 3SC Solutions is an Indian end-to-end-supply chain solutions business founded by former Kuehne+Nagel Asia Pacific vice president Lalit Das.

The two companies say they provide complete supply chain planning and execution services throughout India via a control tower of more than 200 experts.

3SC Delhi "Due to implementation of the new GST tax system, the dominance of decentralized local storage will be diminishing and regional or nationwide logistics locations will gain more importance," declared Log-hub India manager Rabiya Gill. "Nevertheless, the ongoing combination of multiple complex tax systems as well as transit times at the local borders makes it essential to have an in-depth know-how of local tax regimes while re-defining the supply chain networks."

Both companies offer a variety of predictive and prescriptive analytical services including demand profiling and forecasting, supply chain network design, vehicle route planning, load- and packaging optimization.

"There is no Indian competitor that can offer the depth and breadth plus global experience and neutrality that Log-hub and 3SC Solutions (right) together offer to the market," added Das.

According to a study by Agility Logistics, the impact of the GST reforms over time is expected to increase India's internal and external trade by at least 29 percent and 32 percent respectively.

With GST replacing more than a dozen levies with a single tax regime, Agility expects larger logistics companies will benefit more than any other sector, as the GST will substantially cut the cost of moving goods across Indian state borders.

As a result, these companies will reshape their supply chain networks as the new tax regime will no longer provide an incentive to set up one major warehouse in each state, says the Kuwait-based logistics giant. Instead, inventory will be centralized and national warehouse networks will consist of fewer but larger units – a view echoed by Log-hub's Gill.