Rs 8,500 crore GST relief for Telangana irrigation projects

HYDERABAD: In a major relief for Telangana, the

GST Council

, in its 22nd meeting in New Delhi on Friday, reduced the Goods and

Services Tax

(GST) from 12% to 5% on Mission Bhagiratha, Mission Kakatiya and all irrigation projects that have less than 25% material component.
This reduction in the GST will save Telangana nearly `8,500 crore in a single year.Responding to Telangana's demand, the Council also increased the slab for small traders from the existing `75 lakh to `1 crore. Those having a turnover of below `1 crore can now choose a composite tax structure of 1, 2 and 5% in place of GST. This will benefit more than 30,000 registered small traders in the state.

In a major relief to the TRS government, the GST Council also reduced tax on Tandur granite slabs from the current rate of 28% to 18%. This will benefit the state's granite industry, which provides employment to more than a lakh people.

“Our efforts to convince the GST Council have been successful and most of the demands made by the state have been met. The engineering works, where labour component is more, have received a tax cut and this will benefit the state tremendously,“ Somesh Kumar, principal secretary (revenue), Telangana, who presented the state's arguments at the Council meeting, told TOI from Delhi.

In another relief to Telangana, the Council also agreed to examine the proposal to reduce tax on manufacturing units that are primarily doing business outside the state. Most of the units located in Telangana are exporting goods and offering services to other states.

“What we have been demanding is now being taken up by other states in the Council meeting. We hope to secure more relief in the next meeting that is scheduled to take place in Guwahati on November 9 or 10,“ Telangana finance minister Etela Rajender said.