Although the goods and service tax (GST) rates are yet to be finalised by GST Council, the department of consumer affairs, ministry of consumer affairs, food and 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. 
This was stated by Nikhilesh Jha, the department’s additional secretary and financial advisor, at a national conference on Growth Enablers of Warehousing in India: Roadmap to Meet Future Challenges, which was held in New Delhi under the aegis of PHD Chamber of Commerce and Industry.
“Not only will the GST regime streamline the prevailing inadequacies in logistics in general, but it will also address a 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 warehousing in particular,†he opined.
Jha exuded confidence that the finance ministry, in its forthcoming budgetary exercise, would have considerate treatment and allocations for warehousing sector although its food budget constitutes 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 the warehousing sector, he pointed out that given its criticalities, the GST regime would be proactively supportive to logistics and warehousing.
Echoing Jha’s views on the impact of GST on logistics and warehousing, Harpreet Singh, managing director, Central Warehousing Corporation, added that the government would create warehousing and cold storage with modern approach across the country, with more focus on hilly states such as Uttarakhand, Himachal Pradesh, Jammu and Kashmir and the north-eastern belt to make sure that agri produce is not only safely stored, but will also substantially reduce the wastage on fruits and vegetables, including floriculture.
“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, is pegged at Rs 44,000 crore, which needs to be drastically brought down with modern cold chain facilities,†he added.
Others who participated in the conference included Bharat Joshi, co-chairman, Committee on Logistics Management, PHD Chamber, and Ranjeet Mehta, its director. They emphasised the need for better logistics facilities to drastically reduce the transaction cost, which, in India’s case, is estimated at 14.4 per cent as compared to eight per cent of the cost that prevails in the economies of scale.
