Preparing for GST is Turning Out to be a Major Challenge for Railways


One of the world’s largest logistics organisations is now racing against time to register its zonal entities like Western Railways or Eastern Railways in different states. And with the GST registration window set to open only on 25 June, Railways need to hurry. Preparing for GST is turning out to be a major challenge for Railways.

Not only this, several of Railways’s operations such parcel handling are done manually and would now have to be computerised. Again, treatment of charges for long-distance tickets that includes meals is also bothering the authorities.

“It has come to our notice that fresh GST registration  will be starting around June 25 for a limited period. Taking the help of consultants appointed by each zonal railways, necessary actions may be taken to apply for fresh registrations during this limited window so that Indian Railways obtain registration across all states,” Railway Board said in a communication to all its zonal chiefs and heads of production units.

The railway minister had earlier appealed to the GST Council demanding a unified entity status which would have spared this mammoth organisation from getting all its wings – 17 zones or 73 divisions – register separately and avoid paying GST for movements of coaches, wagons or tracks across its production units and depots.

To help Railways manage the migration, Goods and Services Tax Network, the implementing agency for GST, has appointed one of its senior officials as a nodal officer to deal with it, the letter said.

To mimic real life situations post-July 1, even state-wise dummy GST identification numbers have been allotted to be replaced by actual GSTIN when issued.

Several transactions are not on centralised software and, as such, no computerised invoices like in the case of catering services, parcel traffic, advertisements exist.

“Procedures should be put in place immediately for collecting details and computerising them in offices where these transactions occur on a daily basis as uploading invoices on the GST network will be a daily exercise under the new tax regime,” another communication from the ministry said.

Treatment of combined services in rail tickets or treatment of cancellation of tickets are other areas bothering the authorities.

“In the case of composite supply like Rajdhani tickets, which also include catering services, the GST applicable to principal service (transport in this case) will be applicable. CRIS (Centre for Railway Information System) will have to be advised by Railways regarding the catering charges (excluding tax),” an approach paper for implementation of GST on Traffic Commercial Directorate says.

In the case of those trains where charging is composite (fare plus catering) but optional catering has been permitted, the extent and rate of tax would be notified separately, it said.