Purport

In earlier Shloka Bhagvan Shri Krishna explained what is the ideal way for a human to live this mortal life? For that, He gave an example of Lotus which always remains in the water yet keeps separate from it. Similar way Human should use this physical world for mortal existence in a peaceful manner by renouncing any self-desire for the fruits of actions he performs but keep the focus on its ultimate goal of attaining Supreme soul.

One may argue here, what is the purpose of the physical body then?

The answer is given in this Shloka. Bhagvan Shri Krishna explains that the truly enlightened person uses this mortal body as a tool to achieve his ultimate goal that is that the Moksha. A man involves his body, mind, intelligence, and senses to purify his actions and inner self. That is achieved through performing right duty without any self desires for fruits of action as explained in earlier Shloka. This body is a tool to achieve the final destination and not a destination in itself. This rare human body is the only way to reach the ultimate goal of Moksha and one should not waste this opportunity.