Sin­gle win­dow, sin­gle law, sin­gle re­turn

Cargo Talk - - Cover Story -

Ra­jesh BVC Lo­gis­tics

“With the em­pha­sis on ‘Make in In­dia’ gain­ing mo­men­tum by the day, the gov­ern­ment too will have to climb down a few notches to ad­dress con­tentious is­sues of ‘fixed tax rates’, one per cent tax on in­ter-state move­ment of goods, set­ting up of in­de­pen­dent dis­pute re­dres­sal mech­a­nism and some of which are fair con­cerns.

Nee­lakanta,

CEO,

A host of LSPs have made prepa­ra­tions in terms of in­fra­struc­ture net­work re­align­ments to be ready for the ad­vent of the trade sce­nario post GST roll­out. De­ferred roll­out is be a huge dis­ap­point­ment.

With a de­fer­ment, the op­por­tu­nity for re­duc­tion of lo­gis­tics trans­ac­tion costs in In­dia is be lost and this is costly for the coun­try as other emerg­ing mar­kets na­tions will ben­e­fit with in­vest­ments and econ­omy ex­pan­sion op­por­tu­ni­ties.

The fail­ure to roll­out GST will show on the eco­nomic growth rate in the low sin­gle dig­its. Firstly, it erodes the con­fi­dence of the trade from the gov­ern­ment. The in­vest­ments done by the pri­vate sec­tor will con­tinue to give zero yields and in turn the cap­i­tal costs busi­ness prof­itabil­ity.

will

hit

This will also af­fect the pre­pared­ness of the gov­ern­ment tax mo­bil­i­sa­tion mech­a­nism as most of the state tax au­thor­i­ties have aligned al­ready for the GST roll­out on an im­mi­nent ba­sis. in re­duc­tion in cost of do­ing busi­ness that is im­prove­ment in trans­ac­tion cost.

All these im­prove­ments will make In­dian prod­ucts com­pet­i­tive in in­ter­na­tional mar­ket, at­tract in­vest­ment in man­u­fac­tur­ing sec­tor,

some pos­i­tive im­pact on global slow­down.”

R Jayaku­mar, Jayem Lo­gis­tics

It’s un­for­tu­nate that such bills which are of com­mon in­ter­est to na­tion get de­railed due to po­lit­i­cal

Chair­man, am­bi­tions. It’s dif­fi­cult to judge whether it will get im­ple­mented or not keep­ing the 2019 elec­tions in mind. If GST is not rolled out, lo­gis­tics ser­vice providers who have in­vested heav­ily in in­fra­struc­ture will have to take the brunt. Then the pos­si­ble so­lu­tion to ei­ther leases out the in­fra­struc­ture or con­sol­i­date busi­ness. Not only our in­dus­try but the na­tion will also suf­fer. As per one of the re­port, im­ple­men­ta­tion of GST is likely to add al­most 2 per cent per an­num to our na­tional GDP.

It is most un­likely that GST in its true form will be rolled out. GST cou­pled with ‘Make in In­dia’ would have given a big im­pe­tus LSPs who have in­vested

in in­fra­struc­ture will have to take the brunt. GST has the po­ten­tial to re­shape the tax­a­tion

in In­dia

Rev­enue loss due to lack of trans­parency and strin­gent taxes, un­nec­es­sary stock­ing points which add to cost, losses in im­ple­ment­ing ERP/IT sys­tem due to mul­ti­ple ware­houses, heavy trans­porta­tion cost in first and last mile de­liv­er­ies and var­i­ous tax bur­dens on end con­sumer. GST has the po­ten­tial to re­shape the tax­a­tion in In­dia and bring more clar­ity and trans­parency into the sys­tem.”

Areef Pa­tel, Vice Chair­man, Pa­tel In­te­grated Lo­gis­tics

“With dif­fer­ent stake­hold­ers work­ing at cross pur­poses, the pas­sage of the uni­form tax­a­tion struc­ture re­mains a dis­tant pos­si­bil­ity.

If the bill is not passed, ware­hous­ing space will re­main unutilised and will be a huge bur­den on the bal­ance sheets of lo­gis­tics play­ers.

We have so far played the wait­ing game. We are well placed strate­gi­cally to lever­age the ben­e­fits of the new tax regime. As busi­ness like e-com­merce and ex­press de­liv­ery prod­ucts which sup­ports our busi­ness.

Lo­gis­tics play­ers will have to bear huge in­ter­est bur­dens on loans which they have taken for set­ting up in­fras­truc­tural fa­cil­i­ties. One of the main set back is tremen­dous in­crease in costs to client and also to the lo­gis­tics providers. There is also a large amount of con­fu­sion among for­eign in­vestors as re­gards the fu­ture busi­ness en­vi­ron­ment in the coun­try which can have a neg­a­tive im­pact on fu­ture in­vest­ment prospects.

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