GST, EDI top bud­get wish­list

Ex­pec­ta­tions run high in the lo­gis­tics sec­tor ahead of the bud­get ow­ing to the pro­gres­sive out­look of the new gov­ern­ment and the re­cent ‘Make in In­dia’ cam­paign. While the sec­tor awaits crit­i­cal changes that will bring nec­es­sary re­lief from bot­tle­necks, v

Cargo Talk - - Front Page - ABEER RAY

With the econ­omy rid­ing the re­cov­ery wave, the lo­gis­tics sec­tor has been look­ing to find its share. Ahead of the Union Bud­get, the in­dus­try has pinned its hopes on the gov­ern­ment for re­mov­ing the fault lines and press­ing ahead with the re­form agenda. The pre-bud­get con­sul­ta­tions with sec­tor vet­er­ans re­veal that high hopes ride on the ex­pected bud­getary push.

De­spite be­ing the back­bone of the econ­omy, the sec­tor has been await­ing the im­ple­men­ta­tion of the GST, which would sim­plify the tax­a­tion struc­ture. While the stal­warts look for an ef­fec­tive eco­nomic agenda for the next four years they are also hop­ing for steps that would re­move the bot­tle­necks.

Favourable bud­getary steps would on one hand re­as­sure the play­ers of the gov­ern­ment’s con­tin­ued fo­cus on the sup­ply chain and lo­gis­tics in­dus­try; on the other hand it is also ex­pected to open new av­enues with steps like sin­gle win­dow clear­ances, in­for­ma­tion nerve cen­tre and set­ting up of in­dus­try cor­ri­dors. As the need for im­prove­ments in the sup­ply chain in­fra­struc­ture has reached crit­i­cal lev­els, the sec­tor awaits guide­lines that would bring down trans­porta­tion costs as well as re­solve the prob­lems like pil­ing up of con­tain­ers. Ad­di­tions to ser­vice tax neg­a­tive list, 100 per cent EDI, pa­per­less en­vi­ron­ment and ra­tio­nal­i­sa­tion of reg­u­la­tions are some of the other ex­pec­ta­tions voiced by the in­dus­try op­er­a­tors.

Bharat J Thakkar

Co Founder and Joint Man­ag­ing Direc­tor, Zeus Air Ser­vices

Ice Gate is the eCom­merce por­tal of CBEC and gate­way for pro­cess­ing all cus­toms doc­u­men­ta­tion re­lated to ex­ports or im­ports. It is now es­sen­tial to make dig­i­tal sig­na­ture manda­tory, as this would be in keep­ing with In­dian cus­toms’ con­tin­ued progress in EDI im­ple­men­ta­tion and also in tune with be­ing a dom­i­nant mem­ber coun­try of World Cus­toms Or­gan­i­sa­tion.100 per cent EDI should be im­ple­mented with­out de­lay and move to­wards a pa­per­less en­vi­ron­ment.

It is pru­dent to en­sure and make avail­able the fa­cil­ity of a sin­gle win­dow clear­ance for per­mis­sion re­quired prior to ex­ports of phar­ma­ceu­ti­cals, medicine, bulk drugs, leather prod­ucts, amongst oth­ers. There should be no dual process of clear­ance for any par­tic­u­lar mode.

The GST is a sig­nif­i­cant tax­a­tion re­form, which will cre­ate a sin­gle uni­fied In­dian mar­ket; a com­pre­hen­sive tax levy on man­u­fac­ture, sale and con­sump­tion of goods and ser­vices pan In­dia.

It’s about time that the gov­ern­ment gives ‘In­dus­try’ sta­tus to the lo­gis­tics sec­tor as they work be­hind the screen un­able to achieve tar­gets of EXIM.

Shankar Chat­ter­jee

Chair­man & Man­ag­ing Direc­tor, S CUBE Trans Con­ti­nen­tal Group

The gov­ern­ment needs to out­line a task force with de­fined time lines to study and come up with a short/medium/long term plan for im­ple­men­ta­tion to re­duce the over­all cost of lo­gis­tics, par­tic­u­larly, own­ing to all forms of con­trol­lable wastage, which also ad­versely af­fects the sup­ply chain process. Within the next five to seven years, the lo­gis­tics spend as a per­cent­age must grad­u­ally come down to lev­els, which are at par with global stan­dards of 6-8 per cent, from 12-14 per cent of GDP, where we are at present. The gov­ern­ment needs to come up with a clear in­cen­tive plan for in­vestors (Ven­ture Cap­i­tal / PE Funds) to fund lo­gis­tics as a spe­cialised in­dus­try. There is also a need to pro­vide fis­cal in­cen­tives to­wards fi­nanc­ing train­ing and hu­man re­source devel­op­ment pro­grammes. At the same time, there needs to be very strict guide­lines for com­pli­ance to be fol­lowed by all ser­vice providers, as well as on mat­ters re­lated to 'pay­ment de­fault­ers' within the en­tire sup­ply chain.

Man­ish Shah

Man­ag­ing Direc­tor, Mag­num Cargo

Dur­ing the last Bud­get, no fi­nal con­clu­sion was ar­rived on ac­count of ser­vice ap­pli­ca­bil­ity on Ser­vice Tax.

Non ap­pli­ca­bil­ity of Ser­vice Tax on freight for GSA, IATA are to be men­tioned in neg­a­tive list of Ser­vice Tax as the depart­ment it­self is not hav­ing any clear guide­line for pass­ing as­sess­ment or­der. All re­lated ser­vices also should be ex­empted from Ser­vice Tax. Tax Treaty ben­e­fit to be im­ple­mented for the en­tire coun­try. More in­fra­struc­ture at metro cities air cargo com­plex.

Manoj Singh

Vice Pres­i­dent & Head - Cargo, Mumbai In­ter­na­tional Air­port Limited

There are grow­ing ex­pec­ta­tions that Union bud­get 2015-16 will bring strong re­forms to sup­port the air cargo sec­tor.

I think that the gov­ern­ment is mov­ing in the right di­rec­tion with a lot of em­pha­sis on ad­dress­ing high tax struc­tures, GST im­ple­men­ta­tion, e-Com­merce, in­fra­struc­ture ex­pe­di­tion & op­ti­mi­sa­tion, man­u­fac­tur­ing sec­tor and sim­pli­fi­ca­tion of pro­ce­dures to drive the in­dus­try to­wards a growth tra­jec­tory.

The ‘Make in In­dia’ ini­tia­tive and re­struc­tur­ing of SEZs will give mo­men­tum to the man­u­fac­tur­ing sec­tor, thus, lead­ing to growth in ex­ports mak­ing the in­dus­try com­pet­i­tive. I am op­ti­mistic that the pro­pos­als sub­mit­ted by the var­i­ous stake­hold­ers to the gov­ern­ment would be con­sid­ered and favourable de­ci­sions would come out in the up­com­ing bud­get.

SL Sharma

Pres­i­dent, Air Cargo Agents As­so­ci­a­tion of In­dia (ACAAI)

The air cargo in­dus­try is fac­ing nu­mer­ous chal­lenges, which need im­me­di­ate at­ten­tion of the gov­ern­ment. Sim­pli­fi­ca­tion of cus­toms rules and pro­ce­dures is the ur­gent re­quire­ment for the EXIM of the coun­try. We are hope­ful that in the com­ing bud­get the gov­ern­ment will def­i­nitely con­sider all th­ese is­sues and will take steps favour­ing re­duc­tion in trans­ac­tion costs in or­der to make the air cargo in­dus­try more com­pet­i­tive in the world. I would like to see real im­pe­tus in the freight cor­ri­dors, so that the bud­get must keep enough space for this as­pect for the forth com­ing year 2015-2016.

Pradeep Pan­icker

Pres­i­dent, Air Cargo Fo­rum In­dia (ACFI)

‘Make in In­dia’ pro­gramme is a wel­come move and quite in­dica­tive of the same. There should be fo­cus to de­velop In­dian air­ports into hub air­ports so as to sup­ple­ment In­dian EXIM trade. Pol­icy ini­tia­tives are re­quired to pro­mote trans­ship­ment cargo, de­velop on­air­port FTWZ, sim­pli­fi­ca­tion of Cus­toms Pro­cesses, pro­mo­tion of risk based sys­tems, etc.

Gov­ern­ment needs to bring in im­prove­ments in or­der to boost the man­u­fac­tur­ing sec­tor which con­sti­tutes about 60 per cent of the in­dus­try GDP. Trade fra­ter­nity is look­ing for­ward to the gov­ern­ment for pos­i­tive de­vel­op­ments in terms of poli­cies and trade pro­mo­tion ini­tia­tives for growth of the air cargo.

Jee­van Rao Sahib

Man­ag­ing Direc­tor, In­de­lox Ser­vices

We need a cus­tomer-friendly en­vi­ron­ment from gov­ern­ment pro­mot­ing and fa­cil­i­tat­ing the trade to carry on le­git­i­mate busi­ness with­out in­ter­ven­tion and en­forc­ing com­pli­ance strictly with the use of tech­nol­ogy. I would also like to re­quest that the cre­ation of in­dus­try clus­ters or cor­ri­dors pro­vide in­fra­struc­ture at con­ces­sion for SME man­u­fac­tur­ers and ser­vice providers. In­stead of an in­de­pen­dent Min­istry work­ing in si­los, a co­or­di­nated na­tional agenda should be pur­sued which will make whole­some devel­op­ment of trade and in­dus­try, road, rail, air and sea ports with the in­dus­try.

Needs of the ser­vice providers and other agen­cies in­clud­ing cer­ti­fi­ca­tion / trade bod­ies are to be made avail­able in ma­jor cen­tres along with Cus­toms. Full ad­van­tage of grow­ing In­dia’s share in world trade can be re­alised only when the en­vi­ron­ment in which in­dus­try works is con­ducive.

Cyrus Kat­gara

Part­ner, Jeena & Com­pany

Im­ple­men­ta­tion of GST is long awaited, which will bring a lot of ef­fi­cien­cies in ware­hous­ing and dis­tri­bu­tion. For in­ter­na­tional lo­gis­tics the big­gest bot­tle­neck is in­fra­struc­ture (1) in­land trans­porta­tion from ICDs to ports by rail and by truck for and (2) slow through put at ports. More ef­fi­cient and on de­mand avail­abil­ity of rail racks have to be in­tro­duced to en­sure that there is no pil­ing up of con­tain­ers at in­land ports.

In to­day’s IT driven lo­gis­tics, a sep­a­rate cell should be cre­ated to act as in­for­ma­tion nerve cen­tre fore­cast­ing the daily de­mand and sup­ply of con­tainer racks at var­i­ous ports and ICDs. On the cus­toms reg­u­la­tory front we ex­pect the sim­pli­fi­ca­tion of pro­cesses, re­duc­tion of doc­u­men­ta­tion and ra­tio­nal­i­sa­tion of reg­u­la­tory frame­work gov­ern­ing Cus­toms bro­kers by re­mov­ing am­bi­gu­i­ties in reg­u­la­tion. Need ef­fec­tive and sim­ple reg­u­la­tory frame­work to en­able pa­per­less trans­ac­tions.

Bhairavi Jani

Ex­ec­u­tive Direc­tor, SCA Group

The most im­por­tant area, I think will need the bud­get and post bud­get fo­cus, is of course the roll out of GST. So I am hop­ing in the bud­get ses­sion this gets mov­ing. Ad­di­tion­ally there is tax­a­tion re­struc­tur­ing that is be­ing con­sid­ered for E-busi­nesses which can sig­nif­i­cantly change that sup­ply chain.

On the in­fra­struc­ture al­lo­ca­tion front it will be in­ter­est­ing to see how much more al­lo­ca­tion is given for cre­at­ing the in­land wa­ter­ways project a re­al­ity and also push­ing for­ward the Sa­gar Mala plan for coastal move­ment. Both in­te­grated with mul­ti­modal lo­gis­tics can change the face of In­dian lo­gis­tics.

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