The State Government has resolved to oppose 12% GST on work contracts and 28% on granite industry and delayed devolution of State’s share of tax revenue through Integrated GST at tomorrow’s GST Council meeting to be presided over by Union Finance Minister Arun Jaitley.
Finance Minister Eatala Rajender, who will deliver the keynote address at the meeting, told mediapersons that the State Government will reiterate its demand to scrap the GST on the ongoing work contracts or at least peg the slab at 5%. The Government will insist on in-depth debate on the need for putting in place a ‘practical taxation system’ rather than allowing ‘mechanical taxation’ based on perceived rates.
“Granite industry for instance has been asked to pay 28% tax upfront. The tax in the earlier Value Added Tax was 27%, but they were allowed to continue their business paying 2% on submission of C form,” he said.
The Finance Minister held detailed discussions relating to the presentation that should be made at the GST council meeting with Deputy Chief Minister Kadiyam Srihari, Irrigation Minister T. Harish Rao, Chief Secretary S.P. Singh and principal secretaries of Finance, Revenue and General Administration departments here on Friday. The meeting also discussed about the arrangements that had been put in place for Finance Ministers and officials from all States and a 25-member strong Central delegation.
The meeting convened at the behest of Chief Minister K. Chandrasekhar Rao, who is presently in New Delhi, resolved to ensure that the visiting delegates had a comfortable stay in the State capital.
The Finance Minister said that the Chief Minister called on Union Finance Minister Arun Jaitley and briefed him about the difficulties the State was likely to face if the tax slabs finalised for the ongoing projects were continued. The Government had accordingly assessed the impact of the GST on different ongoing projects and a booklet prepared in this regard would be circulated to Mr. Jaitley as well as other members from different States.
Though the Centre had agreed to reduce the impact by slashing tax on ongoing work from 18% to 12%, the State would still face a burden of over ₹ 9,000 crore.
