Mumbai: Despite Public Works Department (PWD) Minister Chandrakant Patil’s promise to fill all potholes till December, the department is likely to miss the deadline, as over 60,000 small contractors in the State are set to stop work citing the additional burden they have to bear after the implementation of Goods and Services Tax (GST).
Last week, representatives of the Maharashtra Government Contractor Association, an umbrella body of contractors working in the State, met Mr. Patil in Kolhapur, expressing their inability to continue work with the additional 18% tax.
According to the association, works that started before the implementation of GST were quoted in line with the previous tax structure.
“We have already paid all the taxes. The tenders were also issued as per the earlier tax structure. Now asking us to pay 18% tax is breaking our backs,” said Milind Bhosle, an engineer, and president of the association.
Finance Minister Sudhir Mungantiwar said he had met representatives of the association and heard their grievances. “We have assured them that no additional burden will be put on them. The State will bear it,” he told The Hindu.
‘No clarity’
However, contractors are worried by the lack of clarity on the money to be paid and the exact reimbursement they will get. “GST on every material to be used for construction is different. The government has given us no clear information, and has not set up any mechanism to ensure additional burden is shared,” said Mr. Bhosle.
The contractors also claim that the government has unpaid bills worth ₹3,200 crore for various works since 2013-14. The contractors fear that they will receive the payments with GST deducted, though they have already paid taxes as per the earlier rates.
Mr. Mungantiwar, however, refuted the claim that bills from four years ago were still pending. “It is not possible, and even if there are a few such cases, I do not think GST will be deducted from it,” he said.