Telangana was the first state to pass the Goods and Services Tax (GST) bill. Now, the state government is looking to set a record of becoming the first state to take the Union government to court over GST as Chief Minister K. Chandrasekhar Rao believes that Prime Minister Narendra Modi is not consulting states while taking decisions on GST.
The CM, however, decided to first warn the prime minister's office (PMO) before dragging the Centre to court and write a letter. "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 CM said.
There are 32 products and services which are coming under higher rate slabs and the state is unhappy about this. The CM has said the taxes will affect all the states and not just Telangana. He has demanded tax exemption for drinking water projects, road construction and irrigation schemes.
Telangana's concerns are understandable, considering the two programmes on which the state is planning to campaign in the next election—Mission Bhagiratha under which safe drinking water would be provided to every household and Mission Kakatiya which is the revival of irrigation tanks.
Telangana also has a number of irrigation projects, and its other pet project is the double bed room housing scheme for poor, which is already facing flak from the public as there are no builders coming forward to take up construction. With GST the project cost can only go up.
Meanwhile, the GST council has decided to slash the tax from 18 per cent to 12 per cent for these schemes, but the Telangana government, represented by IT minister K.T. Rama Rao still thinks there should be no GST on irrigation, drinking water and housing projects.
The chief minister wants all the pro-people schemes to be made GST-free. “It is an injustice to levy GST on the ongoing projects,” he said and claimed that not just Telangana but all other states too will incur great losses because of GST.
Currently statistics are being gathered to make a proper factual presentation, but the fact that Telangana is taking an aggressive stance in the matter is fairly clear.
