India's tax reform: New prospects for supply chains
Last week, India's Empowered Group of State Finance Minister released its first discussion paper on a proposed Goods and Services Tax (GST), which is slated to go into effect April 1, 2010. While discussion of this sweeping tax reform continues, the implications for businesses are significant.
Introduction of the GST would simplify the country's complex tax system of levies on goods and services at the central and state levels.
For the first time, manufacturers would be able to base their logistics decision on operational efficiencies instead of tax optimization.
India's current tax structures have caused manufacturers to set up their distribution patterns through multiple, inefficient channels. The proposed GST could radically change the way manufacturing, distribution and warehousing is conducted in India. Proponents anticipate a far-reaching impact on virtually all aspects of Indian commerce, creating a significant boost in investment and growth in India's economy and development of India's physical infrastructure.
Last week's formal proposal for the GST sets into motion further participation by industry, trade and consumers. YRC Logistics-India is closely monitoring these developments as the Indian government details the GST design, implementation and resulting administration changes.
