COO Prakash Tulsiani says it will reduce waiting time of transporters, cut documentation and costs
India Inc is keenly awaiting the passage of the GST Bill as it will reduce the cascading effect of a plethora of taxes, create a unified market, soften inflation and boost economic growth.
Speaking to Bloomberg TV India, AllCargo Logistics Executive Director and Chief Operating Officer Prakash Tulsiani says the GST regime will reduce waiting time of transporters, cut documentation, cut costs and improve efficiency.
While most companies now work on the basis of what is most tax effective for them, after GST rollout, they will work on the basis of what is more important for them from the logistics point of view and what meets the clients’ demand, he said. Excerpts:
What is your view on the GST Bill and the overall expectations of its passage?
We hope the GST Bill will be passed and it will be implemented soon after. Today, without GST, goods transported from one State to another are treated as crossing one country to another. There is a lot of waiting time involved. There is lot of documentation involved and it takes lots of logistics to get the goods transferred from one State to another.
With GST, we will have one country, which will also be one market. There will be no boundaries of States affecting us and the goods can be transported very quickly and easily.
So today, while most of the companies work on the basis of what is most tax effective for them, tomorrow they will work on the basis of what is more important for them from the logistics point of view and what meets the clients’ demand.
So, definitely this will be a big change in the way the companies approach the market and their customers. Then, obviously, there will be a huge demand for logistics companies.
What is the current tax burden? After the implementation of GST, by what extent do you expect the tax burden to come down?
We don’t know by what percentage points the tax burden will come down. There will be a reduction in cost because there will be less waiting required at the boundaries of States. There will be higher asset utilisation, higher turnaround and efficiencies in the system. So those efficiencies will definitely be passed on to end consumers.
The companies will look at what is more important for them to reach their customers — where would they like to set up their warehouses or distribution networks. And for that there will be huge networks.
What is happening today is that depending on each State, companies are having smaller networks or warehouses. Once the GST is in, then we will have larger warehouses, larger logistics need; contract logistics will come in and distribution networks will be set up on the basis of that. And that will mean companies with pan-India presence such as AllCargo Logistics. Companies with the management bandwidth and the strength to bring in efficiencies and take cost out, will be required.
AllCargo has prepared itself to meet this high demand, which will come in. And that is the reason we merged with CCI Logistics. Our new name is Avashya CCI. We have taken steps towards investment in logistics parks in the NCR.