The Gujarat Contractors Association (GCA) has called meeting of state contractors on June 30, at Ahmedabad, to oppose GST, set to come into force from July 1. The association that represents 2,500 members out of the 5,000 total contractors operating in Gujarat, work on construction of state government projects via its public works department(PWD) works, on bridges, buildings and roads.
“From 1st July 2017, 18% GST on works contract will be levied. The new tax structure will have additional burden of 8% to 12 % on existing government contractors and construction work. While we currently pay close to 8-10% in VAT and other taxes this will add additional burden, which the contractor will have to shell out from his own pocket, which is not feasible. This will result in stalling of government infrastructure projects in a month or two in the state. GCA had organised a meeting on 21st June’17, in which it was unanimously decided to oppose the new GST structure and make representation to the Government. Now we will decide the future course of action on the June 30th meeting that will have 1000 participants in Ahmedabad and discuss the implications of GST structure regime and the impact on the construction industry.” said Arvindbhai Patel, Chairman, Gujarat Contractors Association.
The association is set to come up with a consolidated figure of all the state government infrastructure projects and the effect of GST rates on them and submit it to Gujarat’s Deputy CM and Finance Minister Nitin Patel post June 30 meet.
“Currently there is no ‘change in law’ clause in state government projects that we (contractors) undertake, so the additional tax burden will fall on us. Our demand is that this 18 per cent GST slab set to be levied, be reduced and if it is not solved then we maybe forced to resort to strike and abandon ongoing infrastructure projects. Apart from GST woes, our industry is also reeling from the high royalty rates levied by the state government on mining of sand, construction aggregate, stone etc. The price of the temporary permits for mining per application has shot up from Rs 4,000 to Rs 2 lakhs. We have been making regular representation on this to the government since last 6 months and will hold deliberations on this as well,” Patel added.