Efficiency in connectivity, tax benefits
Vikram Mansukhani, 3PLs, DIESL
GST implementation is expected to bring down the cost of goods, if one is successful in designing an extremely judicious supply chain to ensure that this cost reduction is not compromised by non-availability of stocks due to unadventurous planning and upsurge in distribution costs. Logistics costs in India are high to a large extent due to unavailability of quality infrastructure like good roads, exchange terminals, air freight stations, freight villages, improving rail connectivity to ports. The government could encourage investment in infrastructure development through subsidies and tax holidays, provided this system is transparent, well targeted, and suitably designed for practical implementation.
This will enable us to operate with lower cost and stay competitive in market. As the government has taken steps to bring surface transport and shipping under one head, they should also assign logistics an industry status.
Like the SEZs set up to counter multiplicity of clearances, absence of good infrastructure and to attract foreign investments, the goverment could consider setting up warehousing zones which will offer all advanced facilities.
CEO, Schenker India The rental cost currently is subject to service tax of 14.5 per cent and is attracting tax deductible at source of 10 per cent. If the rent is considered as services being provided, TDS should not be charged at the same rate applicable to interest in deposits. In case of the rent being considered as return on investment, there should not be any service tax. The need is to speed up the process for approval for change of land use.