Telangana govt to approach courts if GST on public projects not removed

By | August 9, 2017
(Last Updated On: August 9, 2017)

Expressing serious resentment over the levying of the Goods and Services Tax (GST) on ongoing government projects, Telangana Chief Minister K Chandrashekar Rao said his government would wage a legal battle against the ‘unilateral decisions’.

The Chief Minister registered a serious protest against the decisions taken at the GST Council meeting on Saturday.

The Council has decided to reduce the tax slab on irrigation, drinking water, and roads and housing schemes to 12 per cent from 18 per cent, while the Telangana government has been demanding the complete removal of tax on such projects.

Rao is also expected to write a letter to Prime Minister Narendra Modi in this regard, according to the Chief Minister’s office.

With the levying of GST on projects started before July 1, 2017, the state government would incur an additional financial burden of Rs 19,000 crore, according to the Chief Minister’s office.

The Telangana government’s flagship programmes, such as Mission Bhagiratha, which was taken up to provide piped water to each household in the state by 2018, and the Kaleshwaram Lift Irrigation project, among others, were taken up with a massive outlay. Part of the funds for these projects have been raised from banks in the form of loans by the government, in addition to budgetary support.

Terming the levy of GST on public projects as a national issue, Chief Minister Rao said: “It is not an issue bothering just Telangana alone. All other states will also incur heavy burden.”

The state government believes that since the cost of the projects has been finalised and allocations have been made in the annual Budget, it will not be possible to accommodate the additional financial burden that now comes in the form of GST. Source – http://www.business-standard.com [05-08-2017]

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About CA Satbir Singh

Chartered Accountant having 12+ years of Experience in Taxation , Finance and GST related matters and can be reached at Email : Taxheal@gmail.com

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