Setback to Telangana

Hyderabad: In a major disappointment to Telangana, the GST Council turned down the plea to reduce GST on infrastructure projects from 12 to 5 per cent at its meeting held in the city on Saturday.

Telangana has been demanding the Council to reduce GST on the construction works citing that the cost of the works would be escalated under the new tax structure. On the insistence of the TS government, the Centre had already reduced the GST from 18 to 12 per cent on the works in the previous GST Council meeting held in New Delhi.

Union Finance Minister Arun Jaitley said Telangana has put the demand to reduce the GST further but no decision was taken in this regard. He clarified that the definition of works has been expanded by including all the construction works taken up by the government under the category of 12 per cent GST.

To a query on the Telangana demand, the minister said there were some mathematical errors in calculating financial burden in taking up works under 12 per cent GST and the TS government should identify them. If the tax is reduced further, the government would have to pay the contractors more money, he cautioned.

Jaitley said Telangana’s demand to waive GST on beedi and reduction of GST on granite industry would be referred to the Fitment Committee. The TS government strongly objected to levying 12 per cent GST on granite and marble raw blocks and 28 per cent GST on finished products.