Ravinder Katyal, Director Air Freight & Co-Load – ISC, DSV Air & Sea, says, “This Union Budget will allow businesses to run through, closer by airports and thereby decentralise the process and save the logistics cost. However, we really need to review that will the investment of Rs 39,61,354 crore on infrastructure development help improve the commercial/cargo facilities or not and the development of Tier II Airports on PPP mode will be for cargo also or only for passenger terminals. (If the same happens for cargo too, this will help better control or lower logistic cost and automatically time will be saved as the facilities will be close to their manufacturing hubs).”

With a feeling of optimism, Ashish Mahajan, Managing Director, Landmark Logistics considers it as a pro-growth budget. “No bad news for the sector could be considered as a good budget and same goes for the logistics industry. There is no change in service tax and reduction in service tax on railway haulage is a good news. No major change in customs duties, allocation for National Highways stepped up and airports in Tier- II cities, will directly or indirectly boost the logistics sector of the country,” he believes.

“In this Union Budget, an infrastructure push along with investment and consumption-led growth presented as the key priority areas for the government. This is quite expected that the government will do required developments for infrastructure and logistics sectors. PPP & ‘Make in India’ is always counted first on the fingertips of the government. As expected this Union Budget indicates that public investment does help in crowding in private investment. Sectors such as automobiles, cement, steel, paper, aluminium and fertilisers, which had the lowest capacity utilisation and were among the sectors that have been the ones hardest hit by demonetisation, are on a special focus by the government,” says “Announcements like total allocation of Rs 39,61,354 crore on infrastructure development, development of selected airports in Tier 2 & 3 cities on PPP mode, etc., will help the logistics industry to grow further. The government has shown its support investment directly by spending more on infrastructure, particularly roads and affordable housing. This will also help raise demand for core sectors such as steel and cement. Construction of roads and low-cost housing is highly labour intensive in India, which will also help generate employment in the economy,” he adds.

Samir J Shah, Chairman, FFFAI believes, “The recent bold steps from the government pertaining to fiscal discipline, restructuring of tax regime, capacity building through setting up of appropriate infrastructure and connectivity have further been strengthened by the Budge 2017-18 announcements. For instance, budgetary allocation of Rs 2,41,387 crore for multimodal transportation sector, increase of allocation for highways from Rs 57,976 crore in 2016-17 to Rs 64,900 crore for 2017-18, identifying 2,000 kms of coastal connectivity roads for construction and development, more emphasis on agro- based produces through NABARD and appropriate logistics facilities for them, emphasis on MSME sector, port connectivity, Greenfield ports, airports in Tier-II & Tier-III cities through PPP mode, logistics parks, etc would have long-term and significant effects on India’s manufacturing and merchandise trade.” “Remarkably, the finance minister has announced the government’s decision to set up 1500 Multi Skill Training Institutes across the country. For these, Rs 1,700 crore has been allotted for FY 2017-18. This highlights the government’s firm commitments towards adding value to capacity building in a larger perspective. FFFAI, in its pre-Budget memorandum had urged the Finance Ministry to address the micro issues related customs clearance. We are optimistic that the finance minister’s commitments on ease of doing business would resolve those in the days to come,” he states.

With the Government presenting the annual Budget, a roadmap has been set for the year. Industry insiders have called Budget 2017-18 well-intentioned and growth-oriented. On a cautionary note, they have also said that the real takeaways will only become apparent once it is put into implementation. The industry is confident with the government move of pushing infrastructure development and also looking into the intricacies of logistics sector such as multimodal transportation, identifying coastal connectivity, logistics parks, Greenfield ports, airports in tier II cities, to name a few. CARGOTALK brings you industry expert views.

Talking about his anticipation from budget 2017-18, says Bharat Thakkar, Past President and Permanent Member – Board of Adviser, ACAAI & Co-Founder, Zeus Air Services, says, “ACAAI has met with Justice R. V. Easwar and made submissions on simplification of income tax, wherein the issues of withholding tax and tax deducted at source on freight difference by airlines have been explained. Thereafter, this matter has also been submitted to Hon’ble Minister of Finance, Secretary, Department of Finance including Prime Minister’s office (PMO) for appropriate action in line of ease of doing business.” The proposed Goods and Service Tax (GST) is needed but with few recommendations such as international transportation of goods including freight forwarding and ancillary services in relation to international transportation of goods such as customs clearance, warehousing, storage, cargo handling, packing, unitisation, etc. should be zero rated. Then, the concept of centralised PAN-based registration must be retained, whereby any service provider in the international transportation segment can have a centralised registration and discharge applicable tax through the GST Portal. Further, it has been recommended that the tax payer should be centrally registered at the principal place of business or registered office and undertake compliance from the central location for all activities throughout the country. The place of supply for international transportation of goods, freight forwarding and related services should be the location of the billing address of the recipient of the services as specified in the invoice issued by the service provider. It is not understood why ease of doing business is being side tracked dual and registration is being introduced The credit should be based on the invoice raised by the service provider without insisting on the …

Abhishek Chakraborty, Executive Director, DTDC Express, expects, “This budget will be crucial in terms of understanding and getting clarity on the implementation of the GST especially over the first two quarters in FY17-18. Strengthening of all IT related infrastructure and projects will be a key to extract the best out of the entire demonetisation drive. It will be great to have the government take concrete measures to ensure a secure IT infrastructure for rapid technology adoption to empower citizens to go digital. Lastly, measures that will increase operational efficiencies such as infrastructure development and boost trade is what we are hopeful for.’’

Prakash Tulsiani, Executive Director & Chief Operating Officer, Allcargo Logistics, wishes, “While there is a wish list of reforms that the sector deserves, a few points need to be considered on priority. At the outset, GST implementation is key for ease in movement of goods in the domestic market, the benefits of which are well discussed in the recent past. Secondly, focus on provisioning for infrastructure development, including better transportation system that will improve business efficiencies, thereby benefiting the sector immensely. The government should also look at fast tracking approvals for new infrastructure projects to boost foreign investors’ confidence.” “The government should consider giving tax benefits for capital intensive infrastructure. The development of logistics parks across the country for speedy delivery is also the need of the hour. Logistics parks will help provide services and facilities to reduce costs, boost efficiency and improve the flow of both raw material procurement and finished goods. The sector is also in need of skilled labour. The government should look at allocating funds for education and skill development in this area as this will be of great help to all logistics players,” he continues. “With the current demonetisation move, the industry and the common man at large have high expectations of lowering tax rates and reviving positive sentiments in the economy. Besides, it would be interesting to see what the budget has in store to boost the manufacturing sector and pump up the rural economy. Reforms in this direction are a ready welcome for the logistics industry,” stresses Tulsiani.

Says Oliver Bohm, CEO, Schenker India, “There are both transformational decisions from last year that deserve a mention along with key industry recommendations. GST Bill; a long-held industry demand, would truly be a game changer for the logistics sector and would make us internationally competitive from the perspective of inventory holding and transaction cost. We anticipate the government to consider providing a blue print to resolve the pending issues of stakeholders before the budget.” “Warehousing & Transportation is still not a recognised sector by the financial institutions and is deprived of the basic support. We look forward to having an industry status to be awarded to the sector along with tax benefits for investment in the warehousing sector, which should be on par with other sectors. Apart from this there should be a special incentive for use of solar energy in our warehouses. Special tax holidays of up to 5 to 10 years for warehouses constructed in rural area can also be considered. The treatment to warehousing for non-agricultural commodities on par with infrastructure projects is to encourage investment in the warehousing industry and additionally creating multi-modal logistics hubs will give transporters the choice of best modes and help in the efficient movement of goods,” he endures. Land acquisition has been a challenge that needs immediate attention which required speed approval process for change of land title. There are significant parcels of land in and around metro cities under agricultural land category. If there is no agricultural activity over the past eight to 10 years, they should be allowed to be converted into commercial use. This will create ample space available for construction of quality warehouses and significantly reduce storage …

Chander Agarwal, Managing Director, TCIEXPRESS, shares, “Timely implementation of GST would result in absorption of various taxes involved in transportation of goods and services and will increase efficiency in our operations. Last year, Rs 2.31 lakh crore was announced to be invested in infrastructure, which shows the importance of upgrading infrastructure. Hence, will look forward to some emphasis on improving the infrastructure this year as well as it is a boon not only for express delivery players but many industries. Thirdly, with the recent implementation of demonetisation, the industry is moving towards a digital and cashless mode of transaction. Hence, more incentives for every cashless transaction are expected. This will motivate increased adoption towards technology. Lastly, it will be interesting to look forward to more schemes under Make in India, Skill India, and Digital India initiatives.”