Sanjay Ladiwala, The Tandur & Shahabad Stone Co., Cement Dealers
GST was introduced nearly a year ago. How do you review GST, from a dealer's point of view?
When it was introduced everybody was very apprehensive. People did not know what the system was going to be. And initially the system had a lot of teething troubles. In our dealer fraternity there were many people who were not tech-savvy. So, for them adapt to a new system and get used to that was very difficult. But eventually we all have to learn and by now they have got on board very well and it is functioning very smoothly. I don't think that there are any hiccups here. Of course, when E-way bill was introduced again there was a little hiccup, and then luckily for our trade most of the goods is transferred by the manufacturer directly to the consumer. So, E-way bill becomes their responsibility, because they start the process of transportation. We had to get on board and the manufacturers were implementing it.
Is there any difference percentage-wise?
Earlier, based on where the location of the market is, the taxes included value added tax (VAT), Octroi, other local taxes etc. From State to State there was a difference in value added tax (VAT), there was a difference in Octroi and local taxes also. If you added up all those taxes, each company had anywhere between 31-33 percentage of total cumulative taxation, which has now come down to a flat 28 per cent and uniform for everybody. So, everybody has benefitted - some to a larger extent and some to a smaller extent. But the most important benefit that they have got is the faster turnover. Because of no waiting of trucks at Octroi nakas, logistics have improved. Earlier, each truck was making one trip in five days from the point of dispatch to the point of consumption in bags. That has now come down to 3 or 3.5 days. The truck which was making 6 trips a month earlier is now making 10 trips. Logistics costs have come down, that is an indirect benefit.
People say warehousing has benefitted a lot?
I don't know much about that because if don't deal in retail. Another thing is not much cement is warehoused because it is mostly delivered directly. But movement, for sure, has improved a lot.
What are the benefits that have accrued to your firm and the industry, like paperless work, transparency and logistics?
Absolutely. Everything is online now, that is so good because everything is virtually automatic. Still it has to get streamlined a little. You have to take credits yet, it will get streamlined in due course. But that is part of the business.
At the lower level of dealership, you have sub-dealers who operate lime depots and the like. Whether they were brought into the system, the bigger ones...
The bigger ones are definitely into the system. It is a very small word for them, they don't even own a computer. The corner shops and all, they are below the turnover limit in any case, so, they don't come into the purview of GST. So they don't get the benefit of set-offs through input credits.
But they are taking such small quantities and directly selling to consumers, the end consumer is not a GST registered person, so he cannot get any input credits.
You have already discussed input credits in brief. Whether the dealers are able to take advantage of the same by now?
Absolutely! Whatever is being allowed is being taken. So, that is not a problem.
That means, involvement of CAs and accountants have increased?
Yes. But even for them, once the system is in place, it has become a routine, going by the dates/deadlines given for filing the returns. In another six months, I think that it will become absolutely streamlined.
Whether there is any direct or indirect impact of GST on cement prices?
No impact at all, because of the government rule that you have to pass on any profit/benefit on to the consumer. We did see for certain period a dip in cement prices.
Eventually, cement price is dependent on demand and supply. Even if there are certain gains or losses, due to fluctuations in demand and supply they have evened out. There was a dip in prices and the consumers have got benefitted, it was about 2-3 per cent at the most. That was neither here nor there. There was no other impact on prices. On costs front, there was an impact, particularly logistics costs have come down. Delivery efficiency has gone up, it is a very big thing, particularly because cement being a bulk commodity - about 300 MT of cement is moving across the country per year.