IMPACT OF GST ON SUPPLY CHAIN TAPMI Supply Chain Management Supply Chain Management (SCM) is the inclusion of all activities during the transportation of goods from the raw ‘material stage to the final stage when the final produet reaches the end user. SCM involves flow of material, infor- ‘mation and finance in all the stages of transportation of goods. The main aim of SCM is to deliver the final product to the end user in a fast and efficient manner. Goods and Services Tax (GST) Loopholes in the previous taxation system culminated in the rise of GST with the focus of the government being on an integrated taxation system, Earlier different rates used to be charged across the states for the goods. Now with the introduction of GST, this double taxation effect will be minimized which will bring down the cost of the product. Impact of GST on Sw Chain Management Supply chain costs consist of fiscal costs (central and state taxes) and physical supply chain costs (transportation, warehousing costs, inventory, etc.). Generally, supply chain configuration has shaped by the fiscal costs. Thus, organ- isations usually have a distributed and fragmented supply chain structure with a warehouse in each state, suppliers in same state as the manufacturing plant and distributed manufacturing facilities. However, this has changed postGST as locations have become tax neutral. Existing supply chains will not be efficient post-GST and therefore, they can adversely impact cash flows and operation costs if not addressed. The structure of supply chain in India is influenced by different taxes across the states. Introduction of GST has elimi- nated multiple state taxes. This helps logistics companies to consolidate their warehouses instead of maintaining one in each state. Proper warehouse consolidation will ensure efficient warehouse management. Hub and Spoke model can be followed for freight movement from warehouse to manufacturing units and retail outlets. Most of the planning postGST will focus on optimising the cash flows. Thete might be a time gap between GST pay- ‘ment and recovery and cash blocked there will impact valuation of inventory. Organisations must re-strategize their supply chain design and optimise inventory to minimise the cash lockup. One of the metrics to determine the impact of cash flow is supply chain velocity. Under the GST scheme, manufacturers and other players in the logistics market have to pay only GST instead of sev- eral state-wise markets. Trade barrier between the states would thus decrease thereby facilitating healthy trade and sales. The taxation system would thus be more efficient and transparent. The cost of the produets is thus expected to come down. GST will also decrease lead times and decrease inventory level at stocking points With GST, manufacturers can move towards customized supply chain models to suit individual customer require- ments. Eliminating stock transfer benefits will increase the share of direct dispatches for dealerships. PostGST, the incoming supply chain might see peripheral benefits for direct out of state purchases and logistics cost. Hence, manufacturers will have a chance to expand their vendor base to different states, Recently, the Central Board of Excise and Customs (CBEC) has given a proposal on e-way bill, which will ease inter- state traffic movement under the GST regime. It is expected that this initiative would standardise the processes and bring more transparency in the system. With the shift in Indian logistics industry from unorganised to organised for- mat, coupled with growth in consumer industries and increasing dispersal in demand, we may see investment oppor- tunities in the areas such as road transportation, railways, multimodal logistics parks, online retail logistics and value- added services According to government estimates, logistics cost is expected to go down by at least 20%. GST is expected to make at least 99% of all transactions transparent. Money saved can further be invested to optimize the business processes and expand the market. GST will ease the process of set ups of factory and manufacturing units. Overall, GST is expected to raise tax collections for the Centre and States. With an end to an inspector raj, the gov- ‘emment hopes to curb black money by putting an end to a parallel economy.