Exempt GST on existing projects: Builders Association

Members of the Builders Association of India (BAI) organised a meeting to discuss the challenges of GST implementation and its effect on construction of ongoing projects.

The meeting was chaired by SN Reddy, National, Vice-President BAI, along with B Sugunakar Rao, State Chairman at their office in Erramanzil with the association members, who demanded the government to exempt all existing projects, finalised before June 30 from GST.

Members also insisted that the old tax structure i.e. VAT be followed. Project costs should be revised under the GST regime for the balance works without affecting any additional financial burden to the existing contractors, demanded BAI.

Reddy said, “We are facing a lot of difficulties with the existing projects that have been sanctioned before June 30. These projects have been sanctioned at the Pre GST, VAT rates and most of them come under service tax exempt category.

The hasty implementation of Goods and Services Tax has made all these existing projects unviable. Moreover, the GST Regime warrants us to pay the applicable GST upfront and claim the input tax credit. This is further increasing the cost burden on the projects.”

“Moreover, there are very few GST registered vendors for all the input materials required and we rely heavily on the unorganised sector to source the raw material required to execute the projects on schedule. Till the backend is sorted, GST is having a severe negative impact on the construction sector,” he said.

Rao added, “It is not justified that the Construction industry is burdened with GST. In the state of Telangana more than one lakh crore worth of projects were under progress as on June 30.

For most of the 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.”

We demand that the central Government and the Government of Telangana pays heed to our demand and takes immediate action to save the members working on the existing projects,” he urged.