GST: Telangana wants tax on social infra projects be reverted to 5%

The State has also sought lower GST rates for beedi, granite and textiles sectors

The Telangana government has demanded that GST on social infrastructure projects be rolled back to five per cent, saying the State's additional burden works out to Rs 19,200 crore, according to a key Lok Sabha member.

The TRS MP from Nizamabad, Kalvakuntla Kavitha said the State had taken up works to the tune of Rs 2.3 lakh crore pertaining to irrigation, housing and roads and building and other projects with some of them at the tail-end of their implementation.

The State government had been paying a VAT of five per cent on such projects, which would now be attracting a GST of 12 per cent under the new taxation system.

"Additional burden on our State will be Rs 19,200 crore. It's one of the major concerns," Kavitha, who is daughter of Chief Minister K Chandrasekhar Rao, told PTI. "Paying this much to the Central government will be really difficult for the State government," she said.

The State has also sought lower GST rates for "sectors like beedi, granite and textiles", she said.

Kavitha expressed the hope that the Centre would consider the demands of the State "sooner or later" but noted that "it's not a single day process".

She said beedi workers in West Bengal and Karnataka, in addition to Telangana, are protesting and the States protecting the interests of these groups would be fighting for a roll-back.

"Our state is going to suffer much more because we have taken up many more (social infrastructure) projects; we have to bear a greater burden," Kavitha said.

But she said the goal sought to be achieved by putting in place the GST regime, which unifies the country as a marketplace to allow free movement of goods, is a "very good and wonderful thing."

Kavitha said Telangana has been supportive of GST from the very beginning but added that issues of concern to the State would be constantly pursued with the Central government for a roll-back.