KCR Begins GST Fight With Centre!

Telangana Chief Minister K Chandrashekhar Rao has reiterated that the Telangana Government would go on for a relentless fight over 12% GST levied on the construction schemes aimed at the people’s welfare. He asked how far it is justified to levy GST on the works started on June 30 whereas the GST came into existence from July 1. Since the project estimates have been prepared keeping in view 5% of VAT it is not possible to change them.

The Chief Minister has decided to write to Prime Minister Narendra Modi to reduce 12% GST on the ongoing projects. The CM held a high-level meeting here on Sunday at Pragati Bhavan on the points to be incorporated in his letter to the PM on GST.  Chief Secretary SP Singh, TS Genco Chairman D Prabhakar Rao, Special Chief Secretary (Irrigation) SK Joshi, Government’s Advisor GR Reddy, Senior IAS officers Somesh Kumar, Shivshankar, Shanti Kumari, Sandeep Sultania, Anil Kumar, Sunil Sharma, Dana Kishore, Ms Sridevi, GHMC Commissioner Janardhan Reddy, E-in-Cs Muralidhar, Ravinder Rao, Ganapati Reddy, Vijay Prakash and others participated.

The meeting has discussed at length on what all the departments that will be hit by the 12% GST. Officers from the departments concerned have placed their estimates before the CM. Though it was decided to write the letter to the PM on Sunday, it is postponed due to non-availability of the expenditure statistics with regard to Irrigation, Mission Bhagiratha, Housing, power projects, roads and other schemes. The officers concerned will meet on Monday and give a final touch to the statistics. After this, the CM has decided to write a letter to the PM with all the details.

How many works are being taken up under various departments at what cost? How many works have already been completed? How much money had already been spent so far? How many works are to be completed? How much burden it would be on works if GST is levied? What is the burden on the State owing to GST? The CM wanted the officials to come out with all these details.  It may take a day or two to compile all this data. Hence the CM decided to write a detailed with the relevant data to the PM.

“The state government has been asking the Centre not to levy 12% GST on the public utility projects. We have pleaded forcibly in the GST Council meeting.  On Saturday in New Delhi we have told the Council in no uncertain words that tax should not be levied on the public utility projects. Since the Telangana State argued the case strongly the Council has decided to reduce the GST from 18% to 12.  We are not satisfied with the decision. 

Irrigation projects like Palamur, Sitarmachandra, and Kaleswaram have begun last two years. Mission Bhagiratha has also launched two years ago.  The first phase was launched by the PM himself! Yadadri, Bhadradri Power plants have also begun in the past. Housing works are also going on for the last two to three years. We have allocated funds for the projects based on the estimates of this year. Meanwhile, the GST came into existence from July 1. It is not fair to implement GST, which came on July 1 to projects, which are there before the date. Some projects are implemented taking financial assistance from the external agencies. The MoUs for them were signed before the GST came into existence. We cannot change them. If 12% GST implemented, the state will incur losses. This is not Telangana state problem. All the states will have this problem.  

The centre should rethink about this. I hope the Centre will respond positively to the issue or else we have no option but to wage a legal battle. Let us write a detailed letter with data to the PM and based on his response we will finalize the next plan of action,” the CM said.