1. Since exports have been categorised at zero rated levy, all input service and goods can be claimed against other liabilities by exporters. This move will make Indian exports competitive and lead to improved load to empty ratio.
  2. Warehousing companies can now do centralized warehousing (basis business needs) instead of worrying about different state’s tax differentials and central sales tax non input availability.
  3. We can now avail 100% input credit on capital goods in the first year itself thereby releasing 50% of excise.
  4. There will be a considerable reduction in material costs since we can take input of VAT on maintenance and repair activities. This will help to improve margins as well.
  5. Infrastructure continues to be an ignored sector as no input tax credit is allowed on civil works. However, effective tax rate may increase by 4%.
  6. Inter branch / interstate transfers have been made taxable which will result in significant cash flow blockages on transfer of empty containers from one state to another.
  7. 3 GST returns per state for logistics and agency businesses.
  8. Every invoice will have to be uploaded line wise resulting in expenses on IT infrastructure.

Tidings XVIII 27