'GST will increase organised warehousing, reduce price'

Chennai, Aug 3: The introduction of Goods and Services Tax (GST) in the country would result in increased organised warehousing sector and merger of smaller warehouses focussed on tax savings, said a top official of JLL India in a statement issued on Wednesday.

The GST Bill, technically called the Constitutional (122nd Amendment) Bill 2014, was introduced for discussion in the Rajya Sabha on Wednesday.

If approved, it will be introduced in the country after a 13-year-long journey since it was first discussed in the Kelkar Task Force report on indirect taxes in 2003.

"Many of the smaller warehouses lack proper infrastructure and facilities. With a new tax structure, the focus would shift on efficiency rather than tax saving (through the means of smaller warehouses). The smaller warehouses will merge to form a more efficient warehouse system," Anuj Puri, Chairman and Country Head, JLL India said.

According to Puri, with the re-alignment/merger of small warehouses automation and newer technologies could be implemented for efficiency and the price charged by organised players will come down.

"The existing top warehousing hubs are Delhi-NCR, Mumbai, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. These eight city hubs put together had a cumulative supply of organised Grade-A and Grade-B warehousing space of around 97 mn sq ft in 2015 and this is expected to grow to around 116 mn sq ft by the end of 2016," Puri said.

The GST will result in emergence of new hubs like Belgaum, Bhubaneshwar, Coimbatore, Goa, Guwahati, Indore, Jaipur, Kolhapur, Lucknow/ Kanpur, Ludhiana, Nagpur, Patna, Raipur, Ranchi, Vapi and Vijayawada.

IANS