GST Council needs to prioritise CE
Dr E Sreedharan was revered and acknowledged as India's 'Metro man' because he managed to do the impossible, i.e., dig into Delhi while it worked and build the metro rail, and that too, in record time. His execution won him laurels. Recently, he was again in the news as the Rs 5,180-crore Kochi Metro was launched after having been completed in record time with no cost overruns. Project execution has been our bane and billions have gone down the drains in cost overruns. Documentation and permissions are definitely a cause, but mechanisation has come to the rescue in most other cases. However, it seems that construction equipment (CE) is facing government apathy. Even the dust of demonetisation had not settled, the industry had to face the next hurdle of the BS-III vehicle ban, even though it does not fall under the purview of the norm. However, both these instances were termed temporary phases. The whole CE industry was looking at GST as the most progressive step in its way. But as the implementation nears, the CE industry is deeply concerned with a possible downward growth due to the inclusion of most of the fast moving construction equipment in the 'luxury' tax bracket of 28 per cent.

ICEMA has already revised downwards its growth figures on construction equipment to 5 per cent from the otherwise estimated 20 per cent growth for the ongoing financial year. According to the Association, majority of the vehicles that contribute to the overall sales of CE in India such as backhoe loaders and excavators will now be taxed at 28 per cent. The GST Council has clarified that it will now consider suggestions and pleas on GST only after its implementation on July 1. This definitely needs a re-look by the GST Council as putting CE in the same basket as luxury cars does not bode well for our infrastructure growth.

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