The Indian Railways might be staring at a substantial loss in irrecoverable integrated (interstate) GST, or integrated GST, if the council meeting on Sunday does not consider its plea to put its own material movement and coach repairing works under the exempt category. (Reuters)

The Indian Railways might be staring at a substantial loss in irrecoverable integrated (interstate) GST, or integrated GST, if the council meeting on Sunday does not consider its plea to put its own material movement and coach repairing works under the exempt category. The national carrier has requested that material for its own use and repair of coaches and locomotives be considered a centralised activity eligible for IGST waiver. “There is no value added when the railways is transferring material for its own use, but going by the technicality of the Act, there is interstate movement,” said an official. Unlike integrated GST levied on other products that are bought by consumers, movement of wagons for repair, for example, would attract interstate tax,but will still be used by railways. This would mean that the IGST paid will not be utilised (for paying ouput tax) through further sale. The railways has been told by the finance ministry that it will consider such movement as interstate transaction initiallyand might review the matter at a later stage after the GSTrollout. “Right now we are worried about the impact of interstate GST,” said the official, adding that the railways is still to assess the quantum of impact,which it will do after the Sunday meeting’s outcome. The railways procures track fittings, for instance, and then these are distributed to various places. Also, its repair workshops are located in certain places which caters to locomotives and coaches from across the country. It has a coach workshop in Bhopal and a locomotive base in Kolkata which caters to the entire country. The carrier is seeking to put these under the exempt category. “We pay taxes when we buy material.

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But bytaxing its distribution, we will be subject to double taxation, as we will not input credit,”added the official. The official argued that unlike group companies, the Indian Railways is on a different platform and to certain extent it should be considered an unified unit.”All our zones will have to register with the 35 states and Union territories and that iswhy we have asked to be registered as a single entity,”said the official. The railways has 17 zones.

There arevarious issues such as parcel and freight apart from material movement and coach repairforwhich the railways has approached the GSTCouncil for eithera special dispensation,exemption or lower rate. Separately, the railways will also be burdened with uploading data of each ticket sold on the GST network as the originating and terminating places of travels could be interstate. “A ticket could be bought in Delhi but the end point could be anywhere.Now each ticket is an invoice and we will need to upload data of each ticket,”said the official. The railways sells around 20 lakh tickets for the air-conditioned categories alone. Till now, such tickets sales were showed in an aggregate basis and no details were required.”We are awaiting the final decision, as everyone knows what are the ramifications,” said the official.