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The transportation aids more than 60 per cent growth of logistics sector followed by warehousing,
which meets agricultural and industrial storage at 25 per cent, while packaging and other related
businesses contributes the rest, he says.
Currently India follows double taxation policy central and state taxes, creating complex web of
taxes on goods and services with each state imposing taxes at various rates on goods that cross its
borders, leading to multiple taxation and complex calculation processes.
At present, the taxation rate goes up at 26.5% (Central VAT (Cenvat) of 14 per cent and State
VAT of 12.5 per cent) apart from 2 per cent state-level corporate tax for moving inter-state goods.
The proposed GST model, which includes both central GST and state GST, proposes to convert
around 29 Central and State taxes and tariffs into a single tax at the point of sale (POS). According
to the draft proposal, GST is expected to bring down the combined Centre and State rates to 18-21
per cent from the current 26.5 per cent.
GST will also eliminate the current practice followed by companies to manage multiple
warehouses at different states due to the existing interstate taxation policy. Companies are forced
to maintain warehouses in each state and on an average each company maintains 20-30 warehouses
in addition to have 20-30 carry & forwarding agents in each state making the supply chain longer,
complicated and inefficient.