The Hyderabad unit of the Builders Association of India today demanded that all government projects finalised before June 30, 2017 should be kept outside of the purview of GST. They have asked for old tax structure of Value Added Tax (VAT) for these projects.
"We are facing a lot of difficulties with the existing projects which have been sanctioned before June 30, 2017. All the members of the association who are executing the government projects are facing problems on implementation of GST, and have also resolved to follow the existing procedure in tax structure that is VAT," S N Reddy, national, vice- president of the association said in a statement.
The association held a meeting with its members to talk about the challenges and the impact of GST implementation and its effect on the construction and infra industry, particularly on the ongoing projects.
"The hasty implementation of Goods and Services Tax (GST) has made all these existing projects unviable as the impact of the new tax regime was not incorporated at the time of working out the project costs," Reddy said.
The GST regime requires us to pay the applicable GST upfront and claim the input tax credit. This is further increasing the cost burden on the projects, he added.