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
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.
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.
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.
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.
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.
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.
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.
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.