State gets Rs 2,000 crore tax relief as Council cuts GST on some works  

HYDERABAD: As expected, the state got around `2,000 crore tax relief on some work contracts at the 22nd Goods and Services Tax (GST) Council meeting held in Delhi on Friday. 
The GST Council reduced the GST from 12 per cent to 5 per cent, where material component was less and labour component is more than 25 per cent. The reduction of tax on work contracts of high labour intensive works would be a major relief to Mission Kakatiya, Mission Bhagiratha and canal works taken up under irrigation projects. “We will get a tax relief ranging from `1,000 crore to `2,000 crore,” commercial taxes principal secretary Somesh Kukmar told Express.

Normally, irrigation canal works require less material component and are more labour-intensive. The reduction of tax will be applicable to all these works, besides Mission Kakatiya and Mission Bhagiratha. 
The GST Council also accepted another demand of TS for increasing the threshold for composite scheme to `1 crore from `75 lakh. “Earlier, it was just `50 lakh. At Telangana’s request, the GST Council increased it  to `75 lakh.

Now, again on our demand, the threshold limit was increased to `1 crore,” Somesh Kumar said. This would help small manufacturers, hoteliers and others in the state. The small traders also got relief as they can file returns once in three months. The slew of measures announced by the GST Counting on exports also help bulk drug manufacturers and other exporters from the state.
The state has been demanding reduction of GST on granite industry. “The Council has decided to take up the subject of granite industry in its next meeting,” Somesh Kumar said.

‘Other states follow TS’
Finance minister E Ranjender said all other states were following in footsteps of TS in picking holes in GST implementation. “Today, GST Council discussed all these issues at length when other states too raised these issues including work contracts,” Rajender said.