Price and quality conscious consumers wanting a shopping experience and not merely products for their household, higher disposable incomes, an increasing trend of purchasing branded products, promotional campaigns orchestrated through multiple delivery channels, widespread proliferation of communication media and so on. Drivers behind the retail boom are far too many to list down.

Brand managers seeking attention-grabbing space for their products in outlets, point of purchase (POP) advertising and promotions, bundled discount offers, sales generated through subliminal stimuli fueled by attractive displays of a wide spectrum of products - all necessitate physical room for the “shopping experience”. This has propelled the advent of organized retail requiring large shopping spaces. Costs of maintaining such shopping areas are only justified by building in economies of scale. These can be obtained by operating through multiple outlets and building a responsive supply chain.

Some of the ingredients of organized retail are backward linkages with supplier networks, producers and logistics service providers, communication networks, custom house agents and financial intermediaries providing services such as insurance and letters of credit. These variables bring in optimization challenges with the end objective of reducing costs, maximizing product and service delivery quality and meeting legal and regulatory compliances whilst continually adding scale ensuring end-user recall.

With a pan-India presence and sourcing models including domestic procurements and imports many concerns in the areas of transfer pricing, customs and excise duties, value added tax (VAT) and service tax arise.

Recording purchase and sale transactions, stock transfers, return of defectives, free supplies etc. on centralized software and keeping them in sync with stock registers not only aids in effective inventory management but also addresses many VAT compliances.

Interstate transfer of goods is an essential feature when supply chains span the length and breadth of the country. This ushers in Central Sales Tax (CST) related matters. With multi-location procurement and organization structures (including warehouses, regional and zonal offices and franchisees) geared to handle agglomeration and distribution of products, transaction costs on account of CST can prove to be irksome. At BMS, we offer to combat this challenge in a unique manner.

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Organized retail sees imports on a large scale. Free trade and preferential trade agreements and compliances on account of the allied acts that Customs as a border control agency administers are some of the complexities on the customs front.