Chief Minister K Chandrashekhar Rao said after GST, the project estimates will go up.
Even as Prime Minister Narendra Modi likened the newly launched Goods and Services Tax (GST) to a "social reform" and spoke at length about its "positive impact" on the country's economy during the last edition of his radio programme, Mann Ki Baat, Telangana Chief Minister K Chandrashekhar Rao, it seems, isn't convinced.
Mr Rao has decided to take the central government to court for taking unilateral decisions on the GST. He said he will also write to PM Modi to draw his attention to the issue.
The levying of GST on all ongoing projects, not just in Telangana but other states too will be injustice, the Chief Minister stressed and demanded that there should be tax exemption for drinking water projects, road construction and irrigation schemes.
The issue was raised in the GST council meeting yesterday in the national capital where IT Minister KT Rama Rao represented the Telangana state government.
The GST council has decided to slash the tax from 18 per cent to 12 per cent for these schemes. However, the Telangana state government, which has been opposing levy of GST on irrigation, drinking water and housing projects, wants it to be completely lifted for people-centric schemes.
All the ongoing projects were earmarked funds in the state budget and after the implementation of the GST, the project estimates will go up. So, it would be extremely difficult to comply with the norms of the new tax regime, he added.
"It is an injustice to levy GST on the ongoing projects. By implementing the GST on the projects started before July 1, the loss will be to the tune of Rs 19,000 crore. Not only Telangana state but other states will also incur huge losses and it will become a national issue," he said.