GST to Cut Logistics Costs for Companies by 30%: Crisil

The implementation of GST will help reduce logistics costs for companies by up to 30% over three to four years due to savings in warehousing cost and elimination of check posts, ratings agency Crisil said on Tuesday. Once the CST (Central sales tax) is phased out, optimisation of warehouses and inventories will accrue in savings on logistics. The elimnation of check posts will also help deliver savings as goods move faster, the agency said, pointing out that the consumer durables sector will benefit the most.
“Manufacturers of non bulk goods spend about 5-8 % of sales on logistics. Goods & services tax (GST) will save warehousing costs of 1-1.5% of sales over the next three-four years. “Elimination of check-post delays will yield additional savings of 0.40.8% , thus taking overall savings to 1.5-2% of sales,“ senior director of Crisil’s research wing Prasad Koparkar said. –

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