Budget 2019

Budget: Hot benefits for cold storage

MEERA SIVA | Updated on January 20, 2018 Published on March 01, 2016

BL01_COLDSTORAGE

The Budget is giving a big push to the cold storage segment of the logistics sector. Basic custom and excise duty on refrigerated containers has been reduced to 5 and 6 per cent respectively (from 10 and 12.5 per cent respectively).

The current 5 per cent basic customs duty rate offered for projects importing cold storage and cold room is being extended to include cold chains. The water transport segment also saw some positive measures. Excise duty on various capital goods, spares and consumable for repairs of ocean-going vessels by a ship repair unit is now exempted.

There are plans to develop new greenfield ports, both in the eastern and western coasts of the country, and the work on the National Waterways is being expedited. Export-import cargo release time and transaction costs are likely to reduce with the proposed amendments to the Customs Act.

Importers and exporters with proven track record can now defer payment of customs duties. Customs Single Window Project will be implemented at major ports and airports starting next financial year.

In the road transport sector passenger transport providers may see some benefits. The Motor Vehicles Act is proposed to be amended to attract new investments and businesses.

The proposed benefits to the cold storage segment will boost the fledgling industry. Players such as Snowman Logistics, Gateway Distriparks could benefit from this. Container Corporation, which is diversifying into this segment, may also see some benefit.

Port-linked cargo transport service providers such as Gateway Distriparks and Transport Corporation of India could benefit from the proposed investments and changes to improve ease of operations. Dredging Corporation of India could also benefit from the thrust on port and waterway development.

Published on March 01, 2016
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