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GST burden on GHMC 4,000 CRORE
The Goods and Services Tax (GST), India\'s biggest tax reform, is set to burden the Greater Hyderabad Municipal Corporation (GHMC) with whopping Rs 4,000 crore. The implementation of the GST will have a massive impact on city infrastructure projects as the Value Added Tax (VAT) will go up from 4 per cent to 18 per cent.
Hyderabad: The Goods and Services Tax (GST), India's biggest tax reform, is set to burden the Greater Hyderabad Municipal Corporation (GHMC) with whopping Rs 4,000 crore. The implementation of the GST will have a massive impact on city infrastructure projects as the Value Added Tax (VAT) will go up from 4 per cent to 18 per cent.
Besides this, the service tax on all operation and maintenance works will increase from 15 per cent to 18 per cent. The GHMC has embarked on major infrastructure projects, including the Strategic Road Development Plan (SRDP) and construction of one lakh double bedroom houses for the urban poor.
The total cost of the SRDP is about Rs 24,000 crore. The civic body has also been spending Rs 7.9 lakh on each 2BHK house.
With the implementation of GST from Friday, the civic body will have to pay 18 per cent tax on total cost of the projects, which is about Rs 3,000 crore. Besides this, the corporation has also outsourced several development activities to the private agencies which have been charging service tax. The officials claimed that the GHMC will have to pay about Rs 1,000 crore to these agencies in the form of service tax.
When queried about the same, a senior GHMC official told The Hans India that the civic body will be burdened with around Rs 4,000 crore with the implementation of the GST. He said the unit cost of the 2BHK house will see a hike of Rs 50,000, besides spending about Rs 3,000 crore VAT on the infrastructure projects.
However, the official said, the civic body's finance wing had already asked the government to exempt them from the GST. In a response to the civic body's request, the State government urged the Centre to give exemption to all the ongoing developments projects under the GHMC. He said the Centre is likely to give clarity on the issue by July 5.
