With concerns over impact on key sectors, Telugu states gear up for GST roll out

Both the Telugu states have finally braced themselves for the inevitable 1 July roll out of the Goods and Services Tax (GST), despite fears over its negative impact on state specific key segments such as irrigation, textiles, granite, beedi, tobacco and cashew kernels.

While integration of the treasury network with networks of GST, commercial taxes and Core banker RBI has been completed there is still an air of uncertainty over the implementation of the new taxation system in the minds of the common man.

Assuring traders and service providers of a smooth transition, B.Sunil Kumar Jain, Commissioner Central Excise, customs and sales Tax, Telangana state said that every effort has been made by the department to make sure that all inconveniences are minimized. “The department has been reorganized in terms of cadre management, infrastructure, IT upgradation, skill development, training and outreach. So no trader should be worried on what will happen on 1 July,” he said.

“The process of registration, filing returns, payment is much simpler than projected,” J.  Lakshmi Narayana, Joint Commissioner Commercial taxes (Policy), who had attended all 17 GST council meetings said. He said that approximately 3 billion invoices will be matched every month under GST, increasing the tax base.

However, both the state governments which have invested huge amounts on long gestation irrigation projects have appealed to the GST council for status quo in irrigation projects. In case of Telangana the estimated cost escalation in irrigation sector is expected to be Rs 20,000 cr.

“We have urged the centre to review GST on high employment generating sectors like Handlooms and beedi making,” Telangana finance minister E Rajender said. Chief Secretary S.P. Singh estimated a 2 % to 3% increase in value of government works across the sectors.

Similarly 2000 Granite units in Andhra Pradesh are bound to reel under the proposed 28 per cent tax regime. AP Small-Scale Granite Industries' Association president Y. Koteswara Rao pointed out that why GST on vitrified tile units is kept at 5 per cent. On the other hand Indian Tobacco Association (ITA) President, M. Umamaheswara Rao, said that the industry will be crippled by the implementation of GST.

AP has urged the centre to reduce tax on fertilizer, biogas, cashew kernels and textiles.  Meanwhile in both the states, textile industry has been organizing protests demanding exempting the sector from GST.