GST Impact has started showing on various projects in Telangana. Contractors of roads, buildings, housing and irrigation projects have confirmed that they can not continue the work unless the government pays for GST as well in the monthly bills.
Earlier, such projects use to attract only 5% VAT and now under GST, that has gone up to 18%. “If the monthly bill is 10 Crore, we have to pay GST of 1.8 Crore. Since works are taken up in bidding our margins are less to bear this expense,” contractors say.
Telangana Government estimated that the GST will bring 19200 Crore Burden to the various departments. The major impact is on Irrigation Department. The government has formed a committee to decide how to go about this situation and get the work moving.
Telangana Government tried its level best till the last minute to get Infrastructure and Irrigation Projects of the state government to 5% Slab. But the Union Finance Ministry did not take up the issue making the additional burden imminent.
