‘Permanent exemption of GST on air & ocean freight must, augment capacity from Indian airports’

Vipin Vohra, Chairman, Continental Carriers says, “The Logistics industry expects that the newly formed Govt will reconsider the proposal of permanent GST exemption for international transportation/ freight services via air and ocean for export shipments, with consideration to include ancillary services in relation to international transportation of goods such as customs clearances, warehousing, storage, cargo handling, packing, port/ airport charges, etc. also be exempted to enable further streamlining of associated costs for exporters. As a global practice, nowhere in the world, GST is charged on the export shipments, moving either through Air or by Ocean. As the GST is ultimately credited back to the exporter, the levy is not justified.  Currently, GST activities are decentralized across states, leading to varying GST queries from each state. Businesses with offices in multiple states expend considerable resources and manpower addressing these diverse requirements. To streamline this process, centralizing GST operations with standardized queries, regardless of the state, is recommended. Such centralization would save taxpayers nationwide significant time and resources. The implementation of National Logistics Policy under PM Gati Shakti National Master Plan and ‘Make in India’ scheme(s) will result in enhancement of international cargo movement through the Airports. Presently, the Cargo Terminals at international Airports is heavily congested at peak time. This expected increase in the cargo will result in further deterioration in the situation. Govt may consider incentive based proposals private players for setting up of the off-Airport Cargo handling locations near the Airports and at the Industrial belts to ease the situation. In order to achieve 10 MMT of annual cargo throughput by 2030 the commercial potential in Tier II and Tier III needs to be tapped and cargo upliftment capacity from Indian Airports needs to be augmented. The Govt should consider ‘Open Sky Policy’ wherein permission for Foreign Cargo freighters be extended to all the Indian Airports, and not restricted to 06 major Airports only. In order to reduce the overall Logistics cost, as envisaged in the National Logistics Policy, it is essential for the Govt to take steps in ensuring that the cost incurred by exporters/importers in movement of their cargo is rationalized and simplified. The freight charges, levied by the transporters (Airlines/shipping lines) and the Cargo Terminal Operators are rational and simplified as they play a major role in determination of the cost of the product.  The government should prioritize achieving a fully paperless cargo documentation process with minimal human interaction. It is imperative that all relevant agencies, organizations, airlines, and stakeholders adhere strictly to this directive. The government must enforce and ensure compliance with this objective to streamline operations and enhance efficiency in the logistics sector.”