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KCR: 12 percent GST not okay, will write to Narendra Modi to reduce tax

Hyderabad: Telangana, which has threatened a legal war with the Central government over 12 percent GST on public utility projects, on Sunday decided to wait for Prime Minister Narendra Modi's response on its demand before deciding future course of action.

Chief Minister K Chandrasekhar Rao has decided to write a letter to the Prime Minister to urge him to reduce GST on the ongoing projects to 5 percent.

File image of K Chandrashekhar Rao. PTI

File image of K Chandrashekhar Rao. PTI

GST Council, which met in New Delhi on Saturday, decided to reduce the GST from 18 to 12 percent but Telangana was not satisfied with this decision.

Angry over the Council's decision, Rao threatened to take the fight to the court.

At a review meeting with top officials on Sunday, he reiterated that the state government will go for a relentless fight over 12 percent GST levied on the construction schemes aimed at the people's welfare.

He asked how far it is justified to levy GST on the works started on 30 June whereas the GST came into existence from 1 July? "Since the project estimates have been prepared keeping in view 5 percent of VAT it is not possible to change them," a statement from the Chief Minister's office quoted him as saying.

KCR, as the Chief Minister is popularly known, discussed with officials various points to be incorporated in the letter.

Though it was decided to write the letter to the prime minister on Sunday, it was postponed due to non-availability of the expenditure statistics. The officers concerned will meet on Monday and give a final touch to the statistics. After this, the chief minister will write a letter to the PM with all the details.

"I hope the Centre will respond positively to the issue. Or else we have no option but to wage a legal battle. Let us write a detailed letter with data to the PM and based on his response we will finalise the next plan of action," the chief minister said.

Telangana argued that the high rate of GST will put huge burden on schemes like Mission Bhagiratha, aimed at providing safe drinking water to every household, Mission Kakatiya, taken up for revival of irrigation tanks, on various irrigation projects, double bed room housing scheme for poor and Roads & Buildings projects.

Updated Date: Aug 07, 2017 07:31 AM

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