GST to benefit logistics sector

Aug 04, 2016: Rajya Sabha passed the most awaited GST (Constitution 122nd amendment) bill on August 3, 2016. It is being introduced in the country after a 13 year long journey since it was first discussed in the report of the Kelkar Task Force on indirect taxes. Shares of companies in the logistics sector were trading mixed after the Rajya Sabha on Wednesday passed the Goods and Services Tax (GST) Constitutional Amendment Act. The stock prices for Gateway Distriparks Limited, Blue Dart Express ended on a positive note. However, the share price of companies such as Allcargo Logistics, Snowman Logistics, and GATI ended with a negative bias on the BSE. GST will ensure that indirect tax rates and structures are common across the country, thereby increasing certainty and ease of doing business. In other words, GST would make doing business in the country tax neutral, irrespective of the choice of place of doing business. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages. Vijay Kumar, COO, Express Industry Council of India, says, "This would really help Indian economy in general and the logistics industry in particular to shake off the inefficiencies and lower transaction cost. However for India to be truly a one Common Market, we are hopeful that the government will ensure that all the border check-posts between states would be removed. The international import and export shipments should be zero rated under GST regime.” “For International shipments to ensure seamless movements with in the country it is vital that the Customs clearance system (ICEGATE) is linked to GSTN.” “Aviation Turbine Fuel is currently treated separately from other petroleum products for claiming mod vat credits and if ATF is not brought under the GST regime there would be substantial cost impact on ATF used in our member aircrafts due to cascading duties leading to price increases.” “We are also hopeful that in order to lower compliance cost, network industries like express industry, banks etc will only need to do single centralised registration under the GST regime as is the case with Service Tax Registration presently.” The subsuming of major Central and State taxes in GST, complete and comprehensive set-off of input goods and services and phasing out of Central Sales Tax (CST) would reduce the cost of locally manufactured goods and services. This will increase the competitiveness of Indian goods and services in the international market and give boost to Indian exports. The uniformity in tax rates and procedures across the country will also go a long way in reducing the compliance cost. Daniel Chopra, executive chairman of Elektrans Group, states, “GST will be a game changer for the Indian economy and for all Indian corporates across the industries. It will step up the GDP growth rate by at least 2 percent. It is a vital move towards 'ease of doing business' by making not only the rate of taxation lower but also uniform across the states in India. We are in logistics and shipping business which are secondary service industries and our fate and rate of growth are totally dependent on the state of economic affairs in the country. Thus, anything which is good for the economy is music to our ears. We congratulate the present Government for this historic achievement.” The major features of the proposed returns filing procedures under GST are as follows: a. Common return would serve the purpose of both Centre and State Government. b. There are eight forms provided for in the GST business processes for filing for returns. Most of the average tax payers would be using only four forms for filing their returns. These are return for supplies, return for purchases, monthly returns and annual return. c. Small taxpayers: Small taxpayers who have opted composition scheme shall have to file return on quarterly basis. d. Filing of returns shall be completely online. All taxes can also be paid online.