Telangana Government is estimating that the newly introduced GST Regime will cost additional 12000 Crore to the State Exchequer. Telangana has demanded to reduce the GST to 5% but the Center did not agree and put that at 12%.
Earlier, 5% VAT used to be levied on the government projects now GST will bring additional 7%. In VAT Regime, the income used to come to the state government in another form. But then, half of the GST will go to the Center’s Share now.
This new tax regime will impact various Prestigious Projects of Telangana Government like 2BHK Homes, Mission Bhageeradha, Mission Kakatiya and various irrigation projects. Telangana CM KCR will sit with the officials to identify a plan to bear this additional expense.
Already several contractors have stopped their works saying that the previously signed contracts are no longer tenable due to this new tax regime and they will only incur losses. They are demanding that the state government should come to their rescue.
