HUBLI: Several railway infrastructure works taken up by the South Western Railway are likely to be affected as contractors executing those works have decided to begin an indefinite strike on Tuesday, demanding resolution of issues pertaining to the Goods and Services Tax (GST).
President of the South Western Railway Contractors’ Association, V S V Prasad told reporters here on Monday that the association demanded that the railways reimburse GST for the works tendered before July 1 when the GST was implemented, and pay the GST for the works tendered after it came into effect.
“Under the GST, service receiver should pay the tax and not the service provider. Being a service receiver, the railways should bear the GST burden and not us who are service providers,” he said.
Prasad said that contractors would calculate the cost of executing the work, add income tax, sales tax, labour cess and profit of 2-4% before participating in any tender. “Though the GST is a welcome move, the railway contractors will die if the railway is not going to save us by bearing the additional burden being caused by the GST. In the earlier contract, it was only sales tax that we used to pay. Railways was exempted from service tax. Now, for the same contract, contractors have to pay 12% GST. The works taken up before July 1 will be affected a lot. Railway contractors are not paid for the works taken up before July 1 due to the confusion. Under the SWR alone, contractors have to be paid Rs 400 crore. The contractors are ready to pay GST for the future contracts,” he said.