While the GST Council cut the tax limit from the original 18% to 12%, KCR has demanded that welfare-oriented projects should be tax-exempt.

Injustice to tax welfare measures KCR to move SC over GST on state govt projects
news Politics Sunday, August 06, 2017 - 15:02

Calling the imposition of the Good and Services Tax on welfare-oriented projects an injustice, Telangana Chief Minister K Chandrasekhar Rao decided on Saturday to approach the Supreme Court on the issue.

According to Deccan Chronicle, KCR is dissatisfied by the decision taken by the GST Council earlier on Saturday to levy GST at the rate of 12% on ongoing projects in areas such as irrigation, roads and buildings, housing and so on.

The GST Council decided to reduce tax limit from the earlier proposed 18% rate, reducing the tax burden on the Telangana government by Rs 13,800 crore. However, the state government has been demanding that welfare-oriented projects should be provided tax exemption under GST. Taxing projects that are in the larger interests of the people would be an injustice, the CM said.

IT Minister KT Rama Rao, had already raised KCR’s arguments in Saturday’s GST Council meeting, demanding exemptions for drinking water schemes, laying of roads and irrigation projects.

Reports say that KCR, who had earlier written to Prime Minister Narendra Modi and Finance Minister opposing the 18% tax rate, also plans to approach the PM on the issue again.

KCR said that implementing GST on projects that started before July 1 will cause the state exchequer losses amounting to Rs 19,000 crore. “Not only Telangana but other states also will incur this loss and it will become a national issue,” he said.

Rao added that the GST decision, coming after the Budget will increase project estimates already in place, and hence cannot be accommodated. “By implementing GST, the project estimates will increase and the same cannot be included in the Budget now. Hence, the Centre should change its decision. Or else a legal battle has to be fought in this regard,” he was quoted as saying

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