Sector demands industry status
With an eye on the Union Budget, the industry’s expectations for effective logistics and supply chain management are high. Despite the challenges, hopes are pinned on solutions to long pending issues this fiscal year.
With the Union Budget 201617 scheduled to be unveiled on February 29, 2016 by Finance Minister Arun Jaitley, the logistics industry has affixed its concerns on the government. Despite being the backbone of the economy, the sector does not get the desired allocation by the government, feel experts. The ‘Make in India’ campaignpg has raised hopes pes too. On one hand, the sector needs eds a significant ramp up in airport, port, sea ports, roads, highway and d transport infrastructure and d on the other hand the demand is to take supply chain and logistics as a priority sector.
For timely completion, to increase the speed of the movements of goods, improve business efficiency, reduce transaction cost and finally enhance the overall service performance of the country, steps like single window clearance and electronic data exchange are expected. It is essential that the logistics gin dust ryy is provided with the necessary infrastructure by the airport operators to effectively handle
their functions in a smoother manner overcoming the minor glitches which keep on erupting presently. On the infrastructure front, the sector expects government to invest in bigger warehousing facilities.
Last year, an important initiative of setting up Air Freight Station (AFS) across the country y was taken, now the sectorsec waits for the refined policy wherein CFS wouldw be allowed to have AFS facility and later n new independent facility of AFS should be cons considered. Logistics experts share their expecta expectations. Excerpts:
AnilAn Khanna, ManagingManagi Director, Blue Dart ExpressEx
Foremost would be our long pendingpe demand of grant of industry status, which would help the sectorsec be independent and resourceful.resourc The proposed GST bill expectedex to be implemented
byb fiscal year 2016-17 will bring in more efficiency and reduce multiple taxes. The implementation of the new draft ‘National Civil Aviation Policy’ 2015 put out by MoCA is awaited. Post the privatisation of major airports, the operating cost at those airports have multiplied manifold without any significant improvement in services offered. Land lease rentals at major airports at key metros have risen considerably. We expect the government to not only speed up the task of developing airports but also ensure that access to business and manufacturing is eased. The government needs to incentivise investment in these infrastructure projects by exempting levy of indirect taxes on all inputs used in such projects or allowing a refund/credit mechanism for taxes paid on inputs used for such projects. The airline industry should be declared as ‘core infrastructure’ which will then allow all consequential incentives to be made available to this sector.
Aviation Turbine Fuel (ATF) should be given a ‘declared goods’ status to attract a uniform sales of the Direct Tax Code (DTC) and implement GST which will be a game changer.
As regards the cargo and logistics industry, the government is expected to introduce vital measures which could be helpful in accelerating the export by extending assorted sops to the shippers via single window clearance of the export formalities, introducing Electronic Data Interface among all the stakeholders and enhancing incentives especially on commodities to be promoted.
It is also essential that the logistics industry is provided with the necessary infrastructure by the airport operators to handle their functions in a smoother manner. It is also desirable to promote dedicated cargo hubs or cargo city in the vicinity of the major metro airports where the concerned cargo activities can be effectively carried out within its periphery. The cooling centres also need to be established at all the vital airport premises to promote the exports of the assorted vegetable products. Likewise, accessible clearing centres should also be positioned to facilitate the mandatory documentation such as issuance of Phytosanitary certificate in respect of the perishable products. into a single tax. Implementation of distorted with three kinds of taxes in place of one and multiple registrations for different states jurisdiction will take away all the benefits that are envisaged in the concept of GST.