Even after reduction of GST impost from 18 to 12 per cent on ongoing projects, the Telangana government may have to take a hit of up to ₹19,000 crore, necessitating a plan of action, including legal recourse.

The Telangana government is hoping that the Centre would reconsider the issue on the ground that the project budgets cannot now be executed with State Budget allocations. If the issue remains unresolved, the state government is also readying for a legal battle.

The higher GST slab impacts not just the ongoing projects of the state, but of all states.

Earlier in the day, during an interaction with N Ram, Chairman of Kasturi & Sons, Chief Minister K Chandrasekhar Rao said, “GST is an experiment. There are divergent opinions on the GST slab system. There are several requests made to the Centre. We have to wait and see how the Centre reacts.”

Later, speaking on the sidelines of an event here, KT Rama Rao, State Minister for IT, Industries and Commerce, who was in Delhi on Saturday to present the state’s case at the GST Council meeting, said, “We have thoroughly assessed the GST impact and have come to the conclusion that it will have far-reaching impact on ongoing projects unless the slab is brought down further. Though it has been brought down from 18 to 12 per cent, it is still high. Earlier, it was just 5 per cent VAT.”

Rama Rao said, “Union Finance Minister Arun Jaitley said the Centre was open for discussion on various aspects of the GST implementation and also consider some of the suggestions. So that window is still open for us to deliberate and sort things out.”