Mayur Gandhi Chief Fi­nan­cial Of­fi­cer Schenker In­dia

Cargo Talk - - Budget -

In­fra­struc­ture sta­tus to the lo­gis­tics sec­tor will en­able the sec­tor to avail medium and long-term debts at ben­e­fi­cial terms. With the an­tic­i­pated growth of the econ­omy, the lo­gis­tics sec­tor will be key to bring down the lo­gis­tics cost from about 13 to 14 per cent of GDP to a lower level. Tax hol­i­days from di­rect tax for ware­houses set up in ru­ral area out­side 50 kilo­me­ters of the spec­i­fied city lim­its can be con­sid­ered as an op­tion in the bud­get as this will gen­er­ate em­ploy­ment in the ru­ral area and also will make it pos­si­ble to cre­ate larger ware­houses which will bring down the over­all cost of lo­gis­tics. The bud­get can also con­sider higher rates of de­pre­ci­a­tion be­ing al­lowed on var­i­ous ware­hous­ing in­fra­struc­ture and han­dling equip­ment. In the up­com­ing bud­get, the gov­ern­ment could con­sider al­lo­cat­ing funds to aug­ment the ca­pac­ity and in­fra­struc­ture at the dry ports in In­dia. This will sup­port the am­bi­tious Sa­gar­mala pro­ject to be more ef­fec­tively con­nected with the in­dus­trial town within In­dia. There will be a need to mon­i­tor the growth and achieve ef­fi­ciency of these ports. Post im­ple­men­ta­tion of GST, it should be pos­si­ble to re­duce the num­ber of dry ports.

The bud­get should al­lo­cate the funds to de­velop in­land wa­ter­ways for freight move­ment in a phased man­ner. There is a need to de­velop skill sets for the ef­fec­tive man­age­ment of fu­ture sup­ply chains in the grow­ing econ­omy of In­dia. There­fore, we would like the bud­get to al­lo­cate funds for ed­u­ca­tion and skills de­vel­op­ment in the area of lo­gis­tics and sup­ply chain.

The gov­ern­ment could set up a com­mit­tee to re­view the var­i­ous mar­itime laws cur­rently ap­pli­ca­ble in In­dia. These laws were framed sev­eral decades back and needs to be up­dated and aligned to meet the chang­ing busi­ness sce­nar­ios in a growth mar­ket like In­dia.

Piro­jshaw Sarkari CEO Mahin­dra Lo­gis­tics

From 3PL com­pany’s per­spec­tive, cur­rently the trans­porta­tion rev­enue is sub­ject to TDS at two per cent. This puts huge pres­sure on cash flow as TDS to­day is far more than tax li­a­bil­ity. Though there is a pro­vi­sion for re­duced rate of tax, it takes lot of time and ad­min­is­tra­tive bur­den.

Ev­ery year, 3PL com­pa­nies like Mahin­dra Lo­gis­tics files its ROI with huge tax re­fund el­i­gi­bil­ity.

Se­condly, un­der GST reg­u­la­tions per cur­rent pro­vi­sions, there is an op­tion for a trans­porter to ei­ther pay GST un­der Re­verse Charge Mech­a­nism (RCM) un­der which, the ul­ti­mate re­cip­i­ent of ser­vices pay the ap­pli­ca­ble GST, or un­der For­ward Charge Mech­a­nism (FCM).

Us­ing FCM would be an ad­van­tage for the ser­vice provider (as it entitles it to claim the in­put tax credit for all the in­puts), but if it is adopted, it needs to be for all its cus­tomers.

This needs to be made cus­tomer spe­cific, as it is not nec­es­sary for all cus­tomer to agree/not agree for FCM. This puts lot of dif­fi­cul­ties for a trans­porter to align with its cus­tomers.

Pro­posed im­ple­men­ta­tion of e-way bills need to have com­pul­sory clos­ing mech­a­nism from the con­signee on de­liv­ery of goods at the des­ti­na­tion. This will do away with the re­quire­ment of pa­per ac­knowl­edg­ment of de­liv­ery of goods and will re­duce huge ad­min­is­tra­tive bur­den of the trans­port ser­vice providers. Fa­cil­i­tate In­te­grated Lo­gis­tics and Man­u­fac­tur­ing Zones (ILMZs) that com­bine rail­way, road and port in­fra­struc­ture along with the man­u­fac­tur­ing set-up.

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