Telangana Government seeks GST exemptions from Centre

Telangana has sought exemptions from the Centre on Goods and Service Tax (GST) imposed on various sections, including maintenance and repairs works of minor irrigation reservoirs, beedi leaves and custom milling and transport services under the Public Distribution System (PDS). The exemptions were sought pointing out how GST on these services would result in a huge financial burden for the State, apart from having an adverse impact on various sections of the public.

The demand for exemption was put forth by Finance Minister T Harish Rao while participating virtually in the 48th GST Council Meeting convened under the chairmanship of union Finance Minister Nirmala Sitaraman on Saturday.

Harish Rao said there were 46,000 reservoirs under minor irrigation in Telangana. Irrigation water was being supplied to 25 lakh acres through these structures. It was very essential to maintain these structures annually and the Telangana government was taking up such works regularly, he said, adding that keeping in view the importance of continuing the irrigation supply without breaks, these maintenance and repair works should be exempted from GST.

The Minister also sought exemption of GST for custom milling and transport services pertaining to the Public Distribution System. Imposing GST on these services, which were essentially taken up for the benefit of poor people, was resulting in a huge financial burden on the State government. Hence,



they should be exempted from GST, he said.

The third exemption was sought on beedi leaves. Pointing out that the Telangana government had been opposing imposition of taxes on beedi leaves, Harish Rao said the union government was already imposing a 28 percent GST on beedis. Under these circumstances, the move to impose an 18 percent GST on beedi leaves as well, which was an important ingredient for making beedis, would have an adverse effect on the industry. This would also impact employment opportunities for the poor, especially tribal people and women who earned a livelihood from rolling beedis, he said, asking the Centre to consider these factors and exempt beedi leaves from GST.

Earlier, welcoming the proposal to amend tax invoice rules, the Finance Minister said a few doubts were being presented before the Council for consideration. With respect to telecom services, as per TRAI rules, digital payments companies like Paytm and others do not have customer address, pin number etc. Due to this, revenue of States where the consumers are located, was going to other States, he said, appealing that this should be considered for addressing.

The GST Council issued instructions forwarding the issues and appeals made by the Telangana government to the GST Fitment Committee for examination. The union Finance Secretary said the issues raised by the Telangana government regarding amendment of tax invoice rules would also be addressed.