Quick Summary
India is considering a major reform in mineral transportation by phasing out the decades-old transit pass system and replacing it with mandatory GST invoicing for every truckload of ore. The move, currently under discussion in high-level stakeholder meetings, is aimed at curbing revenue leakages and
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FAQ :
India is considering replacing the current transit pass system with mandatory GST invoicing for every truckload of mineral ore.
The move aims to curb revenue leakages, improve transparency in the mining sector, and address issues like forgery and under-reporting associated with the existing transit pass system.
The current system is criticised for being opaque, vulnerable to forgery, and a hotbed for under-reporting, leading to significant revenue losses, as highlighted by a CAG analysis in Odisha.
GST invoicing would automate the dispatch process, enable digital tracking, act as both a mining permit and proof of royalty payment, reduce duplication, and curb corruption.
A Comptroller and Auditor General (CAG) analysis estimated that Odisha alone lost nearly Rs 1,400 crore in iron ore royalty in 2022 due to inconsistencies and unchecked e-passes.
Discussions are underway involving the Ministry of Mines, the Department of Revenue, and mineral-bearing states, with an advisory expected soon to phase out transit passes and recognise GST invoices as valid transport documents.
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