GST & National Logistics Policy (NLP)

The sync of the Cheetah landing India after 70 years and the launch of National Logistics Policy (NLP) gives us the sense that India is on the path of becoming a developed country in its Amrit Kaal. NLP aims at reducing the logistics cost from somewhere between 13-14% of GDP to single digit equivalent to global standards.

Instant thought which comes in is the mega Indirect tax reform which took 5 years ago has been the stepping stone in this direction along-with other major contributors like increasing industrialization, rapid changing consumption pattern, etc. GST has ensured smooth movement of trucks across state borders by subsuming CST, entry tax and octroi which consequently has improved the ease of logistic. Not only it has helped in transportation but has helped the firms to rationalize their warehouses consequently yielding growth in supply chain.

It didn’t just stop with this but thanks to the fraudsters which mandated the Government to come up with phenomenal real time reporting of transactions by introducing e-invoicing which further improved the statistics of e-waybills. A number of analytical reports like trend analysis, supply chain, risk analysis, data analysis etc. based on e-way bill system has facilitated in detection of number of tax evasions thus helping the officers to enhance the tax collection. Infact, Fastag data integrated with the e-way bill system helps the GST officers to track the movement of e-waybills using the analytical reports.

From the perspective of GST, such contribution in terms of monitoring the cargo movement by the Ministry of Finance with the newly launched NLP in which Department of Revenue (CBIC & GSTN) is also a member of System Improvement Group (SIG), besides ensuring ease of logistics is certainly going to give further boost to GST collections with the help of data from integration of digital systems of various ministries. The real benefit of GST coupled with PLI scheme is now becoming more visible giving concrete support to Make in India initiative in terms of making India a Global Manufacturing Hub and consequently leading to more people being employed. Needless to say, had there been no GST, we couldn’t have thought of NLP.