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Government to review GST impact on projects

Deliberation among financial advisors of the Central ministries started in the November last week to analyse whether GST contributed in cost escalation of the schemes and hurt their progress.

Published: 06th December 2017 10:11 AM  |   Last Updated: 06th December 2017 10:11 AM   |  A+A-

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Express News Service

NEW DELHI: Finance Secretary Hasmukh Adhia will meet financial advisors of all ministries to assess the impact of GST on government projects. Sources said deliberation among financial advisors of the Central ministries started in the November last week to analyse whether GST contributed in cost escalation of the schemes and hurt their progress.

A note on discussion by financial advisors dated November 30 reviewed by The New Indian Express shows Adhia’s priority is “assessment of impact of GST on schemes and the status of inputs received from the state governments”.

“The agenda will include review of problems reported by the state government regarding implementation of GST under scheme of central ministries and other issues related to tax rates along with the review of software changes required in the ministry’s schemes,” the document said.  

In September, Telangana had asked the Central government to extend tax benefit for projects. The government reduced tax on work contracts from 18 to 12 per cent. It was, however, not in the agreements with some states demanding to lower the tax to 5 per cent.

A senior officer said a Central ministry’s presentation during the internal discussion showed cost escalation by 3 per cent.

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