FM Logistic have announced plans to invest $150m over the next five years in its own warehouses and distribution centres in India.
As part of the investment, the company will start operating a multi-client facility in Delhi National Capital Region in April 2019 and expand its multi-client warehouse in Mumbai. FM Logistic has also acquired 31 acres of land in Jhajjar, near Gurugram, to build a new warehouse. Once set up, the facility designed by FM Logistic’s sister company, NG Concept, will provide 70,000 sq m (750,000 sq ft) of warehousing space for up to 100,000 pallets. In addition to increasing its warehousing and transport capacity in India, FM Logistic is investing in a new warehouse management system and transport management system to provide its customers with more visibility over their shipments.
The investment is partly motivated by the growth potential in logistics offered by the indirect tax reform (Goods and Services Tax, or GST) implemented by the Indian authorities.
Jean Christophe Machet, CEO, FM Logistic said: “We see a huge potential in the Indian market, following the acquisition of Pune-based Spear Logistics in 2016. The GST reform has already enabled us to streamline and optimise the efficiency of our operations. We expect a strong double-digit growth in India in FY 2019-20.”
Some States seek changes in definition, freedom to fix ceiling for levying taxes
The GST Council is likely to consider changing the definition of ‘affordable housing’ for the purpose of levying indirect tax. A full-fledged meeting of the Council will take place after the formation of the new Government at the Centre and in some States after the elections.
A senior government official said States such as Maharashtra, Gujarat and Delhi sought changes in the definition of affordable houses. The issue was raised during the GST Council meeting on Tuesday but could not be considered due to the Model Code of Conduct in place. “The Council could take up this matter in its meeting post election,” he said while adding that the States could be allowed to fix the ceiling for taxability.
The GST Council, in its meeting on February 24, redefined affordable house as a house/flat of carpet area up to 90 sq metres (sq m) in non-metropolitan cities/towns, and 60 sq m in metropolitan cities having value up to ₹45 lakh (for both). Metropolitan cities include Bengaluru, Chennai, Delhi-NCR (limited to Delhi, Noida, Greater Noida, Ghaziabad, Gurugram and Faridabad), Hyderabad, Kolkata and Mumbai (whole of Mumbai Metropolitan Region). Both the conditions need to be fulfilled for the affordable home tag. From April 1, such a home would attract GST at the rate of one per cent but without input tax credit.
The Maharashtra Government wants the ceiling to be ₹60-70 lakh or even ₹75 lakh as it believes this is the ‘realistic’ price level, especially in and around Mumbai. Gujarat also supported the suggestion. Similarly, some States favoured freedom to fix the ceiling rather than having a uniform ceiling as the cost varies from State to State. The official said all the options will be considered in the next meeting of the GST Council.
As of now, there are multiple definitions of affordable housing. In July 2014, the RBI defined affordable housing loans as eligible under priority sector lending, as also housing loans to individuals up to ₹50 lakh for houses of values up to ₹65 lakh located in the six metropolitan centres (Mumbai, New Delhi, Chennai, Kolkata, Bengaluru and Hyderabad) and ₹40 lakh for houses of values up to ₹50 lakh in other centres for purchase/construction of dwelling unit per family.
Similarly, the Ministry of Housing and Urban Affairs defines affordable housing on the basis of carpet area which could be between 30 sq m and 200 sq m. These dwelling units can be part of schemes such as the Jawaharlal Nehru National Urban Renewal Mission, Rajiv Awas Yojana, Pradhan Mantri Awas Yojana or any other housing scheme of a State government or even by a project developed by private developers. Till March 31, such units will attract GST at the effective rate of 8 per cent with input tax credit.
Depending on the quantum of green energy being generated by solar and wind plants and to make thermal power stations more flexible to accommodate renewable energy, tariffs of coal-based electricity may be raised by as much as Rs 0.45/unit.
An increase in the average daily coal production from Coal India & fuel supplies and reduced power demand during winter has led to an improvement in coal availability in thermal power plants. The number of plants having critical stocks reducing to nil.
There are a few coal plants with stocks ranging between one day and three days, but they are not considered critical since they are close to mine mouth or have consumed majority of their coal quota for the period.
There are enough stocks at pithead and non-pithead power plants.
The Goods and Services Tax Council on Tuesday has allowed the Real estate developers to choose between the old and the new GST regimes, for the projects that will remain under construction as on March 31.
The council has also removed the fear among these developers that they might lose accumulated input-tax credit for the under construction projects if they choose the new rate structure.
The Council approved a formula to determine the extent to which tax credit can be claimed on purchases for constructions. This formula is based on four factors given below:
Extent of completion of the project;
extent of booking of apartments by buyers in the project;
extent of invoicing of purchases for that project; and
the proportion of residential space in the project.
If the income-tax credit derived from the formula exceeds what is claimed till March 31, the developer would be eligible to claim the difference. If the derived value is less, the developer would need to reverse a part of the credit.
This is a developer-centric decision, which will help the real estate market. Realtors are likely to retain the old rate structure for projects nearing completion, while opt the new one for projects just begun.
A single developer building multiple projects has been allowed to avail different rate structures for different projects