KT Rama Rao hardens stand, says GST buffer or legal war

Published on 17 Aug 2017 by Team

HYDERABAD: The Telangana government will go all out to present a strong case to impress upon Prime Minister Narendra Modi, Union finance minister Arun Jaitley and the others concerned, the need to exempt ongoing government projects worth over Rs 2.3 lakh crore in Telangana from the Goods and Services Tax (GST).

Chief minister K Chandrasekhar Rao will also write a letter to the PM in this regard."We will raise our voice in a democratic manner. The government of India has to come to the rescue of Telangana. We will calculate how much financial burden the 12% GST will impose on the state and submit the same to the Centre," IT and municipal administration minister KT Rama Rao said during an informal interaction with the media here on Wednesday .

"If the request of the Telangana government is not accepted on or before the GST council meeting to be held in Hyderabad on September 9, then the Telangana government will have no option but to go to court against GST on projects such as extending drinking water supply to the people, providing water for irrigation and housing for the poor, all of which are the duties of the government towards its citizens.

"Telangana was the first state to ratify GST and it will be the first state to go to court against it, if its case is not accepted," KTR said. The option of approaching the courts is always there, and representatives from other states too sympathised with Telangana at the previous GST council meeting, he said.

He, however, hastened to add that the Union finance minister has assured him that each and every case presented by Telangana would be looked into. "I have gone on record in the previous GST council meeting that Telangana will go to court if GST is not exempted on the ongoing projects. It's recorded (in the minutes of the meeting)."

Stating that though the GST rate on ongoing projects has been brought down to 12% from 18%, KTR said: "The contract for Mission Bhagiratha, Mission Kakatiya, housing schemes as well as road projects, to name a few ongoing projects, were given with 5% VAT included in the tender agreement. Now, even this 12% GST will leave a 7% gap, that will have to borne by the government. We want the government of India to consider our case by bringing GST down to 5% or altogether exempting the ongoing projects from GST," the industries minister said.

Meanwhile, sources in the finance department told TOI that GST, being a nationwide levy, has to be the same for all the states and relief to one state may not be possible. If one state is given exemption from GST by the Centre, it would create an imbalance, negating the very objective of the `One Nation, One Tax' system, they reportedly informed the CM.

"Our emphasis will be on getting an exemption for the projects that are under progress. We will not raise any objection to GST on new projects as we can include the higher tax rate in the tender value. We will only insist on exemption to the ongoing projects worth around `2.3 lakh crore," said a senior official in the revenue department.

Source TOI

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