The Telangana chapter of the Builders Association of India (BAI) has urged the Government to exempt all the projects finalised before June 30 from the Goods and Services Tax (GST) and wanted the earlier Value Added Tax (VAT) structure to continue.
Speaking to reporters here BAI national Vice-President S.N Reddy and B. Sugunakar Rao, State chairman also demanded that the project costs be revised under the GST regime for the balance work as contractors were facing additional financial burden. Interestingly, the request comes a day before the crucial GST Council meeting scheduled to be held here on Saturday.
In Telangana more than ₹ 1 lakh crore worth of projects were under progress as on July 1 when the GST came into effect.
ADVERTISEMENT
The BAI, which is the apex representative body of civil engineering construction companies said number of contractors were heading for severe financial problems due to the negative impact of the GST and their tax issues should be addressed immediately. Mr. Reddy said that the projects were sanctioned at the pre-GST, VAT rates and most of them come under service tax exempt category. Moreover, the GST rates were not incorporated at the time of working out the project costs.
It is also unfortunate that the GST Regime warranted them to pay the applicable GST upfront and claim the input tax credit.
Mr. Sugunakar Rao said that the construction industry was the second largest employment generator for the country next to agriculture and this may hit the employment in the unorganised sector that is related to construction industry.
ADVERTISEMENT
Later, the BAI members took out a rally in support of their demands.