Government working on logistics, taxation issues

17 October 2016

Government is working on addressing the key problems of exporters related with logistics cost and taxation to boost the country’s outbound shipments, Commerce Minister Nirmala Sitharaman on October 14 said. She also said that the Ministry has started the review of the foreign trade policy (FTP) with an aim to do mid-course corrections in the export schemes if required.

Speaking at a conference on ‘Strategies for Double Digit Growth in Exports’ organised by Assocham here, the Minister said logistics is one of the “biggest issues” and it makes the cost competitiveness produced by an efficient exporter unviable, Sitharaman said.

“We have quite a few discussions on how best we can overcome these issues in the short term” but logistics are long terms issues, the Minister added. “The priority of this government has definitely been on how to cut down on the logistics challenges whether it is road or reviving inland water ways, identifying newer waterways and improving ports is another big issue,” she said.

The Ministry is also working on making all the ports EDI (electronic data interchange) and on this both the customs and commerce ministry is working on.

“We are engaging with railways to cut logistics cost,” Sitharaman said. Talking about the taxation matter, she said: “it is one of the vexing issues”.

“You can not be paying tax over tax and also exporters can not be taxed for exporting. We recognise that difficulty and I know that GST alone can not give us the solution. “Infact, GST would raise our ambition saying why can’t taxation be simplified and subsumed many of these (state) taxes into GST so that we handle only one tax. We are trying to simplify it,” she said.

“Simplification of tax is the top agenda of this government. We shall definitely address these issues,” she said.

Further, the Minister said that the Director General of Foreign Trade (DGFT) has started a two-day workshop with 36 port officers to look into the issues of exporters.

The Ministry, she said, is working on establishing 24×7 connectivity and presence of authorities at the ports.

The Commerce and Industry Minister further said that “digital and human interface will be made available in every ports of call…soon we will establish 24×7 connectivity and presence of authorities not just customs and DGFT, but also agencies like FSSAI.”

“We shall ensure that there shall not be a day wasted for exports and import for some reason,” Sitharaman said adding the government is also working on improving ease of doing business and imparting skill in people.

Exports were in negative zone between December 2014 and May 2016 due to weak global demand and slide in oil prices. Shipments witnessed growth only in June this year thereafter again entered into negative zone in July and August.

The Commerce Minister also informed that the government is establishing logistics hubs near sea ports for smooth movement of goods. Talking about free trade agreement, she said an MoU was signed recently with Chile so that import of copper will be far more reasonable for Indian industry.

“The copper raw material requirment of India, which otherwise was coming at a very high duty” will now come at reasonable rates, she said.

Source – PTI