E-Way bills could soon be generated for goods transported through metro rail network as GST Council is likely to consider a proposal to include the metro rail in the modes of transport. The Council is also expected to take up a proposal to clear the ambiguity on permanent transfer of Intellectual Property Right (IPR) for GST levy.
The Council is scheduled to meet on October 7. The Law Committee of the Council has already given recommendations on both the proposals among a number of other proposals.
E-way Bill
As on date, GST rules say goods transported by railways or by air or vessels valued above a certain threshold need to have e-way bill. Though the expression ‘railways’ has not been defined in the GST rules, metro rail systems including DMRC (Delhi Metro Rail Corporation) are legally distinct from Indian Railways. According to officials, this is one key reason to include the term metro rail in the rule to overcome operational difficulty by DMRC.
“DMRC has planned to initiate a pilot depot-to-depot cargo movement through Urban Freight Services, utilizing the metro network as middle-mile connectivity. E-Way Bill portal is designed specifically for Indian Railways and does not adequately cater to the movement of goods through a metro rail system, resulting in operational difficulties,” an official explained, adding that metro in other cities could also benefit from the move.
India’s Metro rail network has reached around 1,170 km across 26 cities and could surpass the United States within the next two years. India now stands just 216 km behind the US, which has a Metro rail network of around 1,386 km. China remains far ahead with an urban rail network of nearly 8,000 km.
An e-way bill is an electronic document generated on a portal, evidencing the movement of goods. It also indicates whether tax has been paid for the moving goods. As per Rule 138 of the CGST Rules, 2017, every registered person involved in the movement of goods (which may not necessarily be on account of supply) of consignment value of more than ₹50,000 (can be lower for intra-state movement) is required to generate an e-way bill.
IPR
Presently, permanent transfer of IPR is notified as taxable both as a supply of goods and as a supply of services and no distinct tariff item or heading has been created for such intangible gods, resulting the classification ambiguity. “In order to ensure that is unambiguously payable on every transfer of IPR, whether, temporary or permanent, the Law Committee has recommended both to be treated at supply of services,” the official said.
According to him, such a classification would provide a practical mechanism for payment of tax on cross border supply of IPR from outside India to India as import of services. “It would enable a permanent transfer of IPR to a recipient located outside India to qualify as export of services, allowing zero-rated treatment and refund of unutilised ITC without reference to shipping bill or other custom documentation applicable to export of goods,” the official said.
