Telangana to wage a legal battle against GST on irrigation projects

Telangana Chief Minister K Chandrasekhar Rao has decided to wage a legal battle against the central government for taking unilateral decisions on imposing the Goods and Services Tax (GST) on states.

The state has registered a severe protest against the decisions taken by the GST Council in New Delhi and decided to write a letter to the Prime Minister in this regard.

The CM felt that by levying GST on all on-going projects, not only Telangana state but also other states will be subjected to injustice. The issue was raised in the GST Council meetings earlier and the same is reiterated by Minister K T Rama Rao at the GST Council meeting held in New Delhi on Saturday on behalf of the Telangana State Government.

The CM has demanded the GST should be lifted for drinking water schemes, laying of roads and irrigation projects. The GST council has decided to reduce the tax from 18 percent (Rs 13060 cr) to 12 per cent (Rs 8760 cr) for these schemes.

The Telangana state government which has been opposing levy of 18 percent GST on Irrigation, Drinking water and Housing schemes, which are useful to the people seems to be unhappy even after the reduction to 12%.

On Monday Rao opined that having a uniform GST all over the country is an experiment and one has to wait and see the results of it.

"GST is an experiment. Many countries have brought in the GST. Due to some problems at the implementation level, some countries have withdrawn it. We have to wait and see what will be the result. There are divergent opinions on the GST slab system. There are several requests made to the Centre, we have wait and see how the Centre reacts,” the CM said.

He further added that it will be difficult to implement 12% GST after the state had made its budgetary allocations.

"The project details have to be included in the Budget and it is not possible to now make changes after the Budget, a legal battle has to be fought in this regard,” KCR opined. He has asked authorities to get ready for filing a petition any time.

The requests of the newest state of the country to exempt  GST burden on its flagship projects such as Mission Bhagiratha (GST Rs 35,000cr), Mission Kakatiya (Rs 22,000cr) and Double bed roomed houses (Rs 16000cr) and others totaling a whopping Rs 2.3 lakh cr failed to make any dent at the council meeting.

The Chief Minister on Monday held a meeting with the revenue officials to take a decision on future course of action.