The effect of GST on warehousing and logistics

It has led to an increase in opportunities for Grade A warehouses

“After the implementation of GST, we have witnessed significant growth in the manufacturing and e-commerce sectors as part of the Government’s ‘Make in India’ push,” says Rajesh Jaggi, Vice Chairman-Real Estate, The Everstone Group. “The consistent tax framework coming into place as a result of the GST rollout has helped raise India’s GDP and allowed for the faster and cheaper movement of goods and commodities across the country.” GST has allowed warehousing operators and owners to optimise inventory levels through centralised regional locations (hub) and reduced their operational/manpower footprint through investments in automation—essential for managing big-scale facilities, continues Jaggi. “The development of the hub and spoke model has relieved companies from maintaining inventory in every state with large warehouses in major cities overseeing the whole inventory for a region.”

Indeed, “after GST, the logistics and warehousing sector is consolidating and centralising its warehouse operations to achieve economies of scale and choosing to operate out of Grade A facilities that can integrate automation and digitisation to increase efficiency and incorporate
sustainable elements,” observes Abhijit Malkani, CEO, ESR India. The changes in logistic operations with the advent of GST have led to an increase in opportunities for Grade A warehouses, agrees Jaggi.

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