There is a widespread belief that the implementation of the goods and services tax (GST) will herald a new era for logistics firms. The new regulation will strengthen organized companies’ competitive position vis-à-vis the unorganized sector, as customers will be allowed to offset service tax under GST. Currently, a large part of the surface logistics business is handled by the unorganized sector as tax avoidance helps them keep prices lower. VRL Logistics Ltd, which is also focused on local logistics, is up less than 2%, while Allcargo Logistics Ltd lost 5%. Tulsiani of Allcargo Logistics validates his view by pointing to outsourcing of warehousing activity by private companies.

Source: Mint March 27, 2017 02:03 UTC