Union Labour Minister Bandaru Dattatreya has asked Chief Minister K. Chandrasekhar Rao not to indulge in false propaganda that the Centre had imposed 12% GST on works contracts “unilaterally” as it was not right because the decision was taken at the GST Council meeting where all State governments were represented on Saturday.
The burden on the State government would come down because of a host of factors like input tax credit and reduction in interest rate, on loans borrowed by it to implement the contracts, from 13% to 6%, which was the lowest ever, Mr. Dattatreya told a press conference here on Sunday. He said the rate of cement had dropped by ₹10 a bag and the prices of other construction material like steel and gravel had also come down. There was also no toll tax on transportation of material. Therefore, it was not right to say that the GST at 12% tax would severely impact the projects in progress. Mr. Dattatreya expected the burden to the State government on account of projects to be less than 12%. He said the States would benefit from the new regime as it was not tax-on-tax. Moreover, the inflation rate pre-GST at 2.5% had come down to 1.5%, which was lowest ever.
At a separate press conference, TRS MP B. Narsaiah Goud said the TRS government had initially supported the GST, hoping that it would bring down rates.