Railways wants unified entity status under GST, says Suresh Prabhu

Currently, the Railways will have to register each of its 17 zones in various states after July 1

Railways Minister Suresh Prabhu has said that the national transporter wants to be treated as a unified entity under the proposed new indirect tax regime to enable it to seek single-point registration.

“We have placed a wish list before the GST (goods and services tax) Council. One of the demands is to treat us as a unified entity. It is up to the Council to take a call on our request,” Prabhu told Business Standard.

The railways had demanded an exemption from taxes for its internal supplies. When asked about the impact of the GST on railways, he said a committee had been set up to study this and it was likely to come up with a report soon.

If the GST is rolled out in the current model, the railways will have to register each of its 17 zones or 73 divisions in various states and will have to pay an integrated GST (IGST) for its own product movements like coaches and other materials like tracks for internal consumption. Hence, the reason why the national transporter is demanding unified entity status. Moreover, both input and output services of the railways are likely to become costly after the GST roll-out.

Prabhu said this after dedicating the 12.8-km line from Bolagarh Road to Nayagarh (in Odisha) as part of the ongoing Khurda Road-Bolangir project. The new line is likely to give a lease of life to a stalled 289-km railway line project between Khurda Road and Bolangir Road, which is expected to cost about Rs 3,000 crore.