Uniform taxation rules boost the economy in India

It has become easier to do business in India, as the country has removed bureaucratic roadblocks and implemented a historic tax reform to pave the way for economic progress.

Triped with Indians

Whereas it used to take twelve full workdays to clear cargo through customs in India, the process has now been reduced to just three.

Tushar Deshmukh, DSV India’s in-house customs expert, attributes this to the ‘Ease of Doing Business’ scheme introduced by the government to streamline business procedures in India. The tools it relies on are new and faster technology and a sweeping removal of bureaucratic roadblocks set up by various state agencies.

Advanced 19 places

As a result of these efforts, India has advanced 19 places on the Logistics Performance Index (LPI) to 35th place, which reflects the better and simpler rules for the business community and provides stronger protection of property rights.

"The Indian customs authorities have introduced measures in all major ports to make handling easier and reduce duplicated procedures, especially as part of import clearance. At the same time, the authorities have introduced new technology – such as EDI, RMS and the Dial Mobile app – to keep up with the times," says Ravinder Katyal, Director, Air Freight & Co-Load, Indian Sub Continent.

The new initiatives are also supported by new and simpler tax rules recently adopted by the parliament, which are expected to be implemented in early 2017.

One nation - one tax

The new Goods and Services Tax (GST) will replace a variety of state taxes so that the taxes on the sale and manufacture of goods will be the same throughout India from now on. Up to now, each Indian state has had a different tax rate, which made it difficult and expensive to run a business. A newly released survey shows that logistics providers in India annually lose 87,000 crores rupees (USD 13 bn) due to delays at state borders within India. Truck drivers cover a mere 280 km a day, compared to the US average of 800 km. These problems may now become a thing of the past, thanks to GST.

The implementation of one common tax in India will minimise interruptions of operations and make the distribution chain more flexible. This is crucial for making it easier to do business in India and create a unified market,” Tushar Deshmukh says.

Saving 10% on duty charges

Tushar strongly believes in client satisfaction, which he illustrates with a recently completed job: the client was initially importing raw materials from Europe and while discussing this arrangement with our Brokerage team, they discovered that the suppliers had manufacturing hubs in Thailand and South Korea too. As India had entered into a preferential tariff agreement with Thailand, the client could save 10% on duty charges by importing the same goods from Thailand. This was very gratefully received.

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