~/ G/3l(~ ~ ~ ~S~I f("tfqls ~STEEL AUTHORITY OF INDIA LIMITED

No.SAILIDIRIF/6/20 1711June27,2017

Mr. Mohd JamshedMember (Traffic),Railway Board,Rail BhawanNew Delhi -110001

Respected Sir,

Sub: Timely Issue of Service Tax Certificate for Transportation of Goods(STTG)

As ) ou are kindly aware. the proposed Goods and Services Tax Act, 2017 is to beimplemented w.e.f. 1st July 2017.

Presently, SAIL Plants/Units have been avaiJing of the services in relation totransportation of coal, iron ore, etc. from ports/mines to steel plants and finished

• products from steel plants to various customers/stockyards across India. On anaverage, SAIL pays approx. ~ 600 crore to Indian Railways for the said services permonth. Further, about ~ 27 crore is paid monthly Corthe Service Tax leviable on thesaid services with provision for availment of tax credit. However, Service Tax

zs'<\ Certificate for Transportation of Goods, i.e. the document on the basis of which steel/ plants/units avail credit of said Service Tax, is generally made available to us about 2~.\~onlhs after the date of receipt of services. In some cases, it is noticed that the same is

cj.~ pending for more than 3 months also.

As per the Transitional Rules framed under the Central Goods & Services Tax Act,rl20 17, for availrnent of credit in a situation where the Service Tax is paid by the

~Il service provider under the existing law and the service is provided before the~ appointed date but the invoice in respect of the service is recorded in the books of the

"" reCipient after the appointed date, there exists no provision fur taking credit after theappointed date. In the absence of any benevolent provision, the Service Tax portionon services in relation to transport of goods provided by the Railways before 30th

\. J UIlC. 20 l7, STTG for which are issued after so" June, 2017, would become a cost to~ <' ~~AI L as Steel Plants/Units will not be able to record the transactions in credit ledger/. "-./ in time.

\ We have highlighted the issue to various authorities in Railway Board. However, as........9-n the date, the STTG have been issued only up to February-March 2017. We\ yapprehend that if the STTG are not made available in time, we may lose CENV AT

credit worth crore of Rupee, for no fault of ours. .

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Based on the above background, it is requested that you may kindly advise the Zonal 11Offices to issue the STTG on railway freight collected up to 30th June, 2017 by so"June, 2017 itself to enable smooth transition into the GST regime without any credit i

loss or chance of dispute.

Alternatively, it is requested that the matter may be taken up with concernedauthorities including GST Council seeking relaxation of time limit for submission ofSTTG and allowing credit to SAIL and other service receivers provisionally on thebasis of the Railway Receipts (RRs) issued.

Thanking You,

Yours faithfully,

Copy to:

~inancial Commissioner, Railway Board,New Delhi

- with a request to kindly extend help inthis regard.

,I,I./

,.•.

~ Director, Traffic Commercial (R)Ministry of Railways (Railway Board)New Delhi

fr.~<tTATA ~

Ref:TSLDELI +D 120 J815th June 2017

Dear Sir,Subject: GST related issues

GST, the most significant indirect tax reform, is being implemented from l" July 20J 7. For yourconsideration, we would like to highlight a few points which are of importance not just to Tata Steel butalso to all other B2B customers of Railways:

I. Service Tax Certificate for Transportation of Goods {STTG Certificates) is issued by Railways torail customers for availing cenvat credit currently. However, STTG certificates have not beenincluded in the list of approved documents as per Input Tax Credit Rules applicable in GSTregime. We would request you to take up the matter with the GST council for inclusion. Thisdocument is also used to transfer cenvat credit by rail customer (consignor) to its eligiblecustomers (consignee) - Reference Circular No. 1048/36/20 I6-CX dated 20th September, 2016.

We would also like to inform you that STTG certificates from Nov-16 till the current dateamounting to Rs 57 crores are pending for issuance with various zonal offices of railways (SER:Rs 42 crores; EeoR: Rs 10 crores;ECR: Rs 4.5 crores; Others: Rs 0.05 crore). We are workingwith them for the issuance of these certificates given that these certificates are required to beissued by 30th June, 2017 so that Tata Steel can avail of the cenvat credit. In case the certificatesare not issued by 30th June, 2017, the entire cenvat balance ~I become cost to Tata Steel. Weseek your kind intervention on this subject.

2. The entire system of availing credit in the GST regime is based on the matching concept anddependent upon upload of invoices on the GSTN. Also tax credits can be availed only when {a)the counter party has deposited the GST with the government & (b) uploaded the -correctinformation in the GSTN.

A ietter highlighting these points has been ·submitted by Tata Steel toDy Chief Commercial Manager(FM), SER, Ko Ikata. A copy of the .sarne is also attached for your kind reference. We look forward toyour support in this crucial transition to GST.

Thanking you.Yours faithfully

hi n 1<;1 (, fit'/d~k~LishrJ)Chief Regulatory Affairs

Enclosure: Letter dated 18th May, 2017 addressed to Dy Chief'Cornmercial Manager (FM), SER, Kolkata

TI\TI\ STEEL LIMITEDJeevan Bharati Building Tower 1, 10" Floor 124 Connaught Circus New Delhi-I t 0 001 India

Tel.: 91 11 23327072-7665544000-03 Fax: 91 11 23326265

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Of!M Sir,

A~you ~n! 9W9r~ thgt th~ G.5TwH! IJ~ implf?m~nte~ w.e.f. l~\July JQH/ ~g W@lik~ to hi~hli~ht!:lnd di~q.!~~the fp.llpwing pointl! which are the k~y ,-oncgrm ~nd.Immediate ectign is requlredto. avoicl i'lny fini.mcjgl impact on Tata Ste~l.

1) Cenvat credit ay~i!gd. in the last return till 30th June 17 will P@allowed to ne carry fgrwim::! inGSTregim~. In case the credit is."'~tavailed tiU 30th iune then service f~x:en riil frflignt willbe a l=Qst for Tat~ Steel. At present norrnatlv there is il clelay of 3 II? 4 month in f~i\{inB theservice tax certificate from Railways. for example- From South Eastern Rgilw!lY~ W~ are vet toreceive the certificates from NQv 16 onwards. We request you to kindly expedite to send thecernflcates at the earllest.

l) Service tax certificate issued l:Iy Rai1waYli is not en eligible document fqr (:'~i!11ingthe T~)(credit under GST r~gime. We reql ..HHit you to kindly make necessary fepr~~~ntation fordarifkHU{}n what ~hpuld I:I~the eU~ibfe document for tax credit fly the a!i5e~~.

3) Miltching Concept has been introduced in GST regime whic-h means that the Tax cr~dit on-GH paiq on rail freight will be i'lvai.ab1{! only when R~i1Wi:!V \-IplPiH~~ ~YP9!Y d~tiJiI§ in GSTrtrtlJrn and have made G5T pavment to Gov~rnm~m and if thef~ i~any mi~mfltp.h between thesupply details return filed by Tata Steel and Railways then the Tax creqit will Of! qjsatlgW~d.

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Keeping in view all of the above 3 major concerns we like to discuss the preparedness ofRailways for ensuring the smooth transition into GST regime.

looking forward for your support.

Thanking you,

Yours faithfully,

For lata Steel ltd

Suraj KumarSenior Manager (Sales and EPA Accounts)

TATA STf£L UMfTEO11~ and Aaount Oivlslon Jamshedpur831 001 India

ill'iQincl'ed Offke Bombdy House 24 Homl Mody'St~ Mumbal400 001

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TIG Certificate pending issuance

Month SER ECoR NWR ECR WCR TotalOec-16 - - - - - -Jan-17 1.50 - - 0.68 - 2.18Feb-17 1.20 - - 0.67 - 1.87

Mar-17 8.52 - 0.15 0.75 - 9.42Apr-17 8.97 - 0.20 0.85 - 10.02May-17 7.90 - 0.31 0.69 - 8.90Jun-17 8.35 3.30 0.30 0.70 - 12.65Total 36.44 3.30 0.96 4.34 - 45.04