Budget 2025: Key Changes in Warehousing & Logistics Taxes – What It Means for the Industry

The Union Budget 2025 has come with various major tax reforms, especially for the warehousing and logistics industry in India. This will have a massive impact on the operations involved with warehousing businesses, especially in the growing logistics hubs like Bhiwandi. Companies such as Krishna Landmark that are an important part of the warehousing sector at Bhiwandi need to be aware of the changes to stay on top of requirements and for growth. 

In this blog, we will address the latest tax changes, implications, and the necessary steps for warehousing and logistics companies in India to realign their strategies.

1. Revised GST Rates on Warehousing Services

The most debatable change in Budget 2025 is a change in the GST on warehousing services. Previously, warehousing services for agricultural goods had a 0% GST, meanwhile general warehousing services had 18%.

In Budget 2025, the following changes have been proposed:

• GST on warehousing for non-agricultural goods reduced from 18% to 12%

• No change in GST exemption for agricultural produce

• Input Tax Credit (ITC) on warehouse construction and development allowed up to 80%
  
  

The goal of this policy change is to lower the cost burden of logistics companies in India, so that more capital can be invested in durable warehouse infrastructure in the country. 

Impact: Companies such as Krishna Landmark, which are developing and leasing out industrial parks in Bhiwandi, will now be able to offer a more competitive pricing structure to their clients due to the lower GST rate and better ITC utilization.

2. Clarity on Leasing of Warehouses

To date, there has been some uncertainty regarding the taxation of long-term leases for warehouses. Budget 2025 has put that uncertainty to rest because it has definitively categorized long-term warehousing lease agreements (over 60 months) as infrastructure leasing, and thus gives an avail a concessional GST rate of 5% on lease payments.

Impact: This clarification and certainty is a big win for warehouse leasing companies. Krishna Landmark’s offering of long-term industrial gala units in Bhiwandi will now be a better option for logistics companies and manufacturers who are looking for a tax-efficient lease.

3. Infrastructure Status for Warehousing Parks

Another major update is the official inclusion of logistics parks and modern warehousing clusters under the "Infrastructure" category.

This move unlocks several benefits:

• Lower borrowing costs for warehouse developers
  
  

• Access to priority lending from banks
  
  

• Faster environmental and building clearances
  
  

Impact: Krishna Landmark, known for its large-scale industrial parks in Bhiwandi, can now access easier funding and offer warehousing spaces at more competitive rates. This will lead to higher occupancy and improved ROI for investors.

4. Deduction on Capital Expenditure for Logistics Startups

Budget 2025 also introduces a 100% deduction on capital expenditure for logistics new start-ups that invest in their capital or fixed assets for infrastructural projects, including warehousing, cold chains, and transport hubs.

This includes:

• Automated storage systems
  
  

• Climate-controlled warehouses
  
  

• Solar-powered logistics parks
  
  

Impact: New logistics companies starting up in Bhiwandi can leverage the low startup costs that paid for Krishna Landmark's established capital footprint, meaning no set-up costs for establishing their own warehouses. This concession clearly reduces entry barriers, which will encourage innovation in warehouse and logistics technology.

5. National Logistics Policy 2.0 Integration

The Finance Minister announced National Logistics Policy 2.0 to supplement the tax changes. The policy lays out new user standards for digital infrastructure. The tax amendment and standards relate to:

• Reducing logistics cost from 14% of GDP to 8% by 2030
  
  

• Promoting multi-modal logistics hubs
  
  

• Digitizing supply chain networks
  
  

Tax credits and other incentives will be offered for logistics companies that follow the company's new digital standards.

Impact: warehousing companies in India, especially in logistics hotspots like Bhiwandi, and requiring to modernize facilities are provided an incentive to comply with the updated standards for the modernization of their operations, through Krishna Landmark's future-ready facilities.

6. Increased Budget Allocation for Logistics Infrastructure

The government has set aside ₹1.2 lakh crore for logistics infrastructure, which encompasses:

• Freight corridors
  
  

• Last-mile connectivity to logistics parks
  
  

• Modernization of Inland Container Depots (ICDs)
  
  

This will lead to lower travel times and operating costs for third-party logistics providers (3PL) and e-commerce warehousing companies.

Impact: Logistics companies operating from Krishna Landmark's industrial park in Bhiwandi will have better connectivity, faster delivery times and reduced costs making them more competitive in both national markets and international markets.

7. Tax Benefits for Green Warehousing

The Budget incentivizes sustainable warehousing by providing tax breaks on investments in green warehousing solutions, specifically:

• Solar panels
  
  

• Rainwater harvesting systems
  
  

• Eco-friendly construction materials
  
  

Impact: Krishna Landmark, which already has implemented sustainability features in their warehousing spaces, will benefit from attracting more brands that are environmentally friendly in their logistics and manufacturing.

What This Means for Warehousing in Bhiwandi

Bhiwandi continues to maintain its dominance as one of the most critical warehousing hubs in India due to:

• Its strategic location near Mumbai, Nhava Sheva Port, and major highways
  
  

• Abundant availability of large-format industrial spaces
  
  

• Well-developed infrastructure by companies like Krishna Landmark
  
  

With the 2025 Budget reforms, Bhiwandi is expected to see an even greater inflow of investment from logistics companies, 3PL providers, and manufacturing units looking to optimize storage, cost, and supply chain efficiency.

How Krishna Landmark Is Adapting

As one of the largest providers of warehousing space in Bhiwandi, Krishna Landmark has already started the process of addressing the Budget 2025 announcements, and is executing on several initiatives as a result.

• Offering GST-compliant long-term leasing options
  
  

• Partnering with green tech firms to build sustainable warehouses
  
  

• Supporting logistics startups with capital-efficient leasing models
  
  

• Expanding infrastructure to meet National Logistics Policy 2.0 standards
  
  

Krishna Landmark also offers manufacturers and companies that want to leverage the warehousing and logistics tax innovations an industrial park, enabling development that is future-ready, tax-advantaged, laid out in bulk, and has connectivity that's second to none.

Conclusion

The Budget 2025 has emphasized the message: warehousing and logistics are here to catalyze India's growth. The reduced GST rates, identified infrastructure, and green initiatives are a signal for businesses to start investing in logistics-ready spaces and warehouses.

If you are a 3PL operator, e-commerce company or manufacturing brand, you have a chance to unlock efficiencies and leverage tax saturation with the recent tax reforms.

Are you looking for a tax optimised, infrastructure compliant warehousing solution in Bhiwandi? Choose Krishna Landmark-as your business logistics meets strategic business growth.