NEW DELHI: The Merchandise Exports from India Scheme (MEIS) is being redesigned to make exports from India GST-compliant and the issue of working capital requirements under the new tax regime is being deliberated upon by the Government, said Mr. Neeraj Prasad, Additional Commissioner, GST Cell, Central Board of Excise and Customs (CBEC) while addressing FICCI’s Executive Committee Meeting.
He said that the GST regime would help build competitive advantage by leveraging supply chain. While manufacturing and trading activities at present times have a strong taxation orientation and the cost of logistics is high vis-a-vis the mature markets, adoption of GST will reduce the cost of production and distribution. It will also pave the way for the transfer of consignments directly from plant to the wholesaler and retailer, thereby eliminating the inventory cost in many supply chain operations.
Mr. Prasad said that technology in logistics, such as the use of advanced telematics, real-time vehicle tracking and route planning are likely to help manage and execute operations in a efficient and seamless manner and added that implementation of GST will finally set the ball rolling for the emergence of the hub and spoke model in the Indian transportation sector. He said that job work under GST would encourage lean manufacturing even as the switchover to GST for the largely unorganized logistics sector would be challenging as the interplay of technology will intensify. GST, he said, would lead to re-alignment in the main verticals of supply chain and would bring down the dominating unorganised factor in the logistics business.