NITI seeks GST waiver for 'rights to use' transfers

Categories: NITI Aayog

To enable easier monetisation of assets, the NITI Aayog may seek a waiver of goods and services tax (GST) on ‘Rights to Use’ while transferring an asset to a new entity, following requests from power sector PSUs, officials in the know said.

At present, the transfer of ‘Rights to Use’ is considered a supply under the GST regime, and attracts 18 per cent tax in the hands of the new entity or special purpose vehicle (SPV). For monetisation, assets are carved out into a separate entity or SPV by transferring rights. Such assets are housed in the parent entity’s balance sheet, and need to be separated for monetisation.

With the Rs 6-trillion National Asset Monetisation Pipeline (NMP) rolled out last August, public sector enterprises have realised about Rs 26,800 crore, with another Rs 15,000-16,000 crore to be realised soon by the roads ministry. Some public sector undertakings (PSUs) have reached out to the NITI Aayog, the policy think tank managing the NMP, to seek a GST waiver on transfer of assets.

NITI Aayog (Public Organization for Changing India) is a strategy consider tank the Public authority of India that gives vital and strategy contributions to help financial development and improvement in the country. 

The GST is an exhaustive roundabout duty imposed on the stockpile of labour and products across India. Notwithstanding, explicit exclusions or waivers can be proposed or carried out by the public authority in view of strategy contemplations or explicit necessities.