'Builders experiencing various issues on GST'

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SME Times News Bureau | 26 Aug, 2017
Builders, who have been facing some "teething problems" under the Goods and Services Tax (GST) regime, are likely to submit a "comprehensive representation" to the GST Council and State Finance Ministers by the end of next week seeking clarifications on various issues, an official said on Friday.

"We welcome the new tax system. We have been experiencing some teething problems in the transition period. Amongst various issues that are disturbing the industry, the compliance for submitting GST returns for a particular month within 10th, 15th and 20th of the next month would be difficult for contractors," Builders' Association of India's Eastern Centre Chairman Subrata Das said.

Construction companies and contractors have several site offices and they need to transfer their machineries from one site to other. "According to GST law, transfer of machinery from one state to another will attract IGST and it will impact the cash flow," he said.

The association had earlier approached Union Finance Minister Arun Jaitley regarding the problems that the industry would face in the new tax regime.

"It is expected we will submit a comprehensive representation to the GST Council and State Finance Ministers by the end of next week after compiling the feedbacks from all the centres," Das said.

The association, which has 150 centres across the country, has been organising GST workshops in different parts of India and its Eastern (Kolkata) centre will hold a workshop on August 30.

Association's Past President S.K. Basu also raised how reverse charge mechanism for every goods and services received from unregistered dealers was affecting the cash flow of builders and contractors.

Basu explained that builders have been facing problems with the ongoing projects.

"For a particular project, the contractors and builders had quoted an amount in the tender on the basis of particular tax assumptions. Now, with the introduction of the new tax regime, tax rates and incidence have increased from previous regime. Who will bear the additional tax?" he asked.

According to him, the tax incidence for construction projects (depending on the nature of works) was up to around 6 per cent in pre-GST regime and now it has been increased to 12 per cent.