HYDERABAD: With the GST Council not buying its argument on the need for GST rate reduction on work contracts, state government is in a fix what to do now.In a major embarrassment to the KCR government, Union finance minister Arun Jaitley said the council meeting here on Saturday that the state’s maths on GST were wrong. Though Jaitley was happy with the hospitality of the state government, he bluntly disagreed with the state government’s calculations.Chief Minister K Chandrasekhar Rao had already announced that the state would take legal recourse if the Centre failed to reduce the GST on work contracts either to zero or 5 per cent. In the latest scenarion, the future course of state government will be decided after the chief minister returns from Delhi where he underwent an eye surgery.
However, putting up a bold face, state finance minister E Rajender hoped that the next GST Council meeting, which will be held in Delhi on October 24, would take a final call on state’s demand. “We may get some clarity on GST rate on work contracts at next meet,” Rajender told reporters. The GST Council wanted the Fitment Committee to redefine the definition of work contracts, Rajender disclosed.
Asked about reduction of GST on granite and beedi industries, Jaitley said that they were not part of agenda present meeting. “We cannot take representations and discuss the same in GST Council meetings. Any representation from the state will be first referred to the Fitment Committee which will place same before GST Council for discussion,” Jaitley explained. On the state government’s concern over delay in getting the central tax devolution to the state, Jaitley said a major portion of IGST went to the states and the gap of revenue when compared to previous periods was very “narrow”.
Builders not happy
A delegation of Builders Association of India met Arun Jaitley after GST Council meeting and submitted a representation saying that they would go on strike from September 15 if GST on work contracts was not reduced to 5 per cent. “We will meet on Sunday and decide future course of action,” Builders’ Association of India national vice-president SN Reddy told Express.