GST Council May Bring Metro Rail Under E-Way Bill Rules, Treat Permanent IPR Transfers as Services

New Delhi, Sep 28 (KNN) The GST Council is likely to consider a proposal to explicitly include metro rail in the modes of transport covered by e-way bill rules, potentially enabling businesses to generate e-way bills for goods moved through metro networks.

The Council, scheduled to meet on October 7, is also expected to consider a proposal to remove classification ambiguity over the GST treatment of permanent transfers of Intellectual Property Rights (IPR). The Law Committee has recommended both changes among several proposals under consideration.

Metro Rail To Be Added To GST Rules

Under existing GST rules, goods transported by rail, air or vessel above the prescribed threshold are required to be covered by an e-way bill. However, the term ‘railways’ is not defined in the GST rules, while metro rail systems such as the Delhi Metro Rail Corporation (DMRC) are legally distinct from Indian Railways.

Officials said explicitly mentioning metro rail in the rules could address operational difficulties faced by metro operators and businesses using the network for cargo movement, the businessline reported.

DMRC has planned a pilot for depot-to-depot cargo movement through Urban Freight Services, using the metro network for middle-mile connectivity. However, the existing e-way bill portal is designed around Indian Railways and does not adequately support cargo movement through metro systems, officials said.

“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 noted.

The proposed change could also benefit metro systems in other cities as they explore freight movement, the official added.

IPR Transfers May Be Treated As Services

The GST Council may also consider changes to the tax treatment of permanent IPR transfers. At present, permanent transfer of IPR is notified as taxable both as a supply of goods and as a supply of services, while the absence of a distinct tariff classification has created ambiguity over its treatment.

The Law Committee has recommended that both temporary and permanent transfers of IPR be treated as supplies of services to provide greater clarity on GST liability.

Officials said the proposed classification could also provide a clearer mechanism for taxing cross-border supplies of IPR from outside India as imports of services.

Similarly, permanent transfers of IPR to recipients outside India could qualify as exports of services, potentially allowing zero-rated treatment and refund of unutilised input tax credit, without requiring shipping bills or other customs documentation applicable to goods exports.

Wider Implications For Businesses

For businesses, particularly MSMEs using metro networks for urban cargo or dealing in intellectual property, the proposed changes could reduce procedural uncertainty and provide greater clarity on GST compliance.

An e-way bill is an electronic document used to track the movement of goods and is generally required under Rule 138 of the CGST Rules for consignments valued above Rs 50,000, subject to applicable exceptions and state-level provisions.

(KNN Bureau)