GST TO TRANSFORM WAREHOUSING & LOGISTICS : AS&FA, DEPARTMENT OF CONSUMER AFFAIRS

Even though the GST rates are yet to be finalized by GST Council, Department of Consumer Affairs, Ministry of Consumer Affairs, Food & Public Distribution is quite optimistic that with its advent, the warehousing sector will see its transformation to a next level as the GST regime would have preferential treatment towards warehousing in view of its critical significance, according to its Additional Secretary & Financial Advisor, Mr. Nikhlesh Jha.

“Not only the GST regime will streamline the prevailing inadequacies in logistics in general but also address host of issues relating to transportation and warehousing in terms of their indirect taxation and therefore, the Ministry of Consumer Affairs is confident that GST as and when implemented will reshape the warehousing in particular”, felt Mr. Jha.

Addressing a National Conference on “Grwoth Enablers of Warehousing in India: Roadmap to Meet Future Challenges” under aegis of PHD Chamber of Commerce and Industry here today, Mr. Jha also exuded confidence that the finance ministry in its forthcoming budgetary exercise would have considerate treatment and allocations for warehousing sector although its food budget constitute significantly higher allocations to implement various social schemes of the government.

Without revealing concrete measures as to how GST would come to the rescue of warehousing sector, Mr. Jha pointed out that given its criticalities, the GST regime would be pro-actively supportive to logistics and warehousing although the GST Council has yet to evolve the new rates.

Speaking on the occasion, Managing Director, Central Warehousing Corporation, Mr. Harpreet Singh also endorsed the views expressed by Mr. Jha on GST’s impact on logistics and warehousing and added that the government would create warehousing, cold storage with modern approach across the country with more focus on hilly states such as Uttarakhand, Himachal Pradesh, Jammu & Kashmir and the entire northern eastern belt to make sure that not only agri production is safely stored but also substantially reduce the wastage on fruits and vegetables including flori culture.

According to him, even with existing warehousing facilities, the agri produce loss is not much but what is startling is the loss of fruits and vegetables which as per current estimates are pegged at Rs.44,000 crores which needs to be drastically brought down with modern cold chain facilities.

Among others who participated in the conference consisted of Co-Chairman, Committee on Logistics Management, PHD Chamber, Mr. Bharat Joshi and its Director, Dr. Ranjeet Mehta, emphasizing the need for better logistics facilities to drastically reduce the transaction cost which in India’s case is estimated at 14.4% as compared to 8% of the cost that prevails in the economies of scale.