GST made simpler

The Builders Association of India (BAI) organised the second General Council & Managing Committee Meeting in Shamshabad over the weekend.

The meeting was inaugurated by Energy Minister G Jagadish Reddy along with HN Vijaya Raghava Reddy- National President BAI, B Seenaiah, Former National President (BAI), SN Reddy – National; Vice President BAI (South-1), N Sachitan and Reddy- All India Trustee BAI and B Sugunakar Rao - State Chairman BAI.

Raghava Reddy said “This is a critical time for the industry as there is a major push by the government to push the infrastructure projects, opening a plethora of opportunities for the construction industry. This coincides with the introduction of GST.

We need to be more systematic and process driven in our approach. This meeting will help us provide direction to the members to equip themselves and make the most of the activities in the construction arena.”

SN Reddy added, “GST is a major reform and the Construction industry needs to understand the finer aspects of the new regime besides understanding the Input Tax Credit to the Sector. Some infrastructure projects that are currently under implementation, the proposed GST rates could raise costs, if there is insufficient built in contingency factor and limited scope for contract renegotiation.

For operational toll road projects, the impact would be only to the extent of operations and maintenance related activities as the toll charges on road/bridge projects have been exempted thereby providing some relief.”

“This is a challenging time for the Construction sector as with the introduction of GST the apparent GST rates arehigher rates; however, the sector is likely to benefit under GST regime from the availability of input tax credit (ITC),” said Rao.

“As under the current tax regime the benefit of input tax paid is not fully available, the benefits arising out of input tax credit on the raw-materials available under the GST regime would result in an overall neutral tax incidence for construction services, however we will truly ascertain the benefits over the next few months,” he said.