State scores partial win on GST cut

The Telangana state government got partial relief in the GST Council meeting in New Delhi on Friday

The GST Council decided to cut GST to 5 per cent on projects where the manpower component is more than the machinery component.

TS has been demanding that the GST be cut on government projects — irrigation schemes, Mission Bhagiratha, Mission Kakatiya, 2BHK housing, from 12 per cent to 5 per cent.

The actual benefit that will accrue to the government on account of this decision is yet to be ascertained, officials said.

The Telangana state government got partial relief in the GST Council meeting in New Delhi on Friday. The expectation was that the decision would give partial relief in irrigation projects and Mission Bhagiratha.

“This will certainly help the government minimise the tax burden on irrigation projects and Mission Bhagiratha works. Many other states supported TS demand on GST cut on government projects,” said Somesh Kumar, principal secretary, commercial taxes.

TS government’s demand on GST reduction on projects of public importance was widely debated in the GST Council meeting. Finance minister Etala Rajendar said though the Centre had “partially approved our demand, it would resolve the issue completely in the next round of meeting.”