Telangana Chief Minister K. Chandrasekhar Rao on Saturday threatened the Centre that if it persists with the 18% levy under GST on irrigation, drinking water and housing schemes the State will “wage a legal battle”.
Accusing the Centre of taking unilateral decisions on GST, Mr.Rao felt that by imposing GST on all ongoing projects not only Telangana but other states also will be subjected to injustice. Noting that the Chief Minister registered a severe protest against the decisions taken by the GST Council in New Delhi on Saturday, a release from his office said Mr.Rao has decided to write a letter to Prime Minister (Narendra Modi) Sunday.
Industries, IT and Municipal Administration Minister K.T. Rama Rao conveyed the concerns of Chief Minister at the Council meeting. It is not the first time the CM had raised concerns over the GST’s impact on the State. The Telangana government had already registered protests on the matter and the CM had written letters to the PM and Union Finance Minister.
Following the CM’s appeal that drinking water schemes, laying of roads and irrigation should be exempted from GST, the Council decided to reduce the tax from 18% to 12% for these schemes. However, the Centre has decided to levy 12% GST on the ongoing projects. It is an injustice to levy GST on ongoing projects. Imposition of GST on projects, work on which began before the roll out of the new tax regime on July 1, would translate into a loss of ₹19,000 crore.
“The project details have to be included in the budget and it is not possible after the budget, he said.
The project estimates would increase as a result of the GST levy 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,” the Chief Minister declared.
