Game-Changing New Indian Tax

by | Apr 27, 2017

Effective from 1st July 2017, the Indian government are introducing a Goods & Service Tax (GST) which will be a single tax on manufacture, sale and consumption of goods throughout India.

The tax will work similarly to VAT, being collected at every stage of sale or purchase, and is expected to unify the country as one common market.

The GST replaces the complex multi-layered tax structures that are currently in place centrally and at state level, which are widely believed to be a burden on sales of Indian products in the international market.

The new tax has four tiers and will be chargeable at rates of 5%, 12%, 18% and 28%, with the lower rates for essential items and the highest for luxury and de-merit goods.

Manufacturing in India should benefit from relief on tax of purchases through the Input Credit system, meanwhile Indian exports will be effectively zero rated.

These changes are also expected to change the face of Logistics in India, especially inter state movements, as vehicles should move more freely without the burden of extensive queues at checkpoints, which are currently being caused by unnecessary paperwork related to tax collection.

Reports suggest that on average, a truck in India sits at checkpoints for 16% of its working time, only travelling around 85,000km per year compared to 150,000km, or more, in western countries.

Supply chains have become fragmented, as currently enterprises need warehouses in every state.

The introduction of GST should create a seamless market, without any difference between inter-state or intra-state sales, and is expected to facilitate the structural re-engineering of the entire Indian logistics network.

Logistics providers will be incentivised to leverage hub-and-spoke supply chain networks, by operating large central warehouses and re-modelling transportation routes.

Our Regional General Management (RGM) team includes local Uniserve staff on the ground in India, who are ideally positioned to provide further insight into the new GST. If you have any questions regarding the GST, or the Indian market in general, then please email

Alternatively, if you would like to find out more about Uniserve’s extensive range of ocean and airfreight services, to and from the Indian-Sub-Continent, then please email or call 01708 259400.


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