Pune civic body receives another blow, GST on development work hiked from 12% to 18%
Pune : NpNews24 Online – Pune PMC News | Common people are reeling under inflation due to fuel and power rate hikes. Now, the civic body is feeling the heat. The water resources department decided to increase water tariff by 2.5 times for the Pune Municipal Corporation (PMC). Moreover, an increase in GST from July 18 will hit development works. The GST Council has increased the tax on material needed for development works from 12 percent to 18 percent. This will result in cost escalation of various projects. (Pune PMC News)
The council has decided to hike GST on food items by 5 percent. This will increase prices of milk bags, food grains and other eatables. This will affect the end user. The common people who are fed up with inflation will now have to face further price hikes. The GST Council has decided to increase the tax from 12 percent to 18 percent on brick construction, roads, flyover, railway, metros, treatment plants, crematorium construction, conservation of historic monuments, dams and canals’ construction, pipelines, water treatment centres, educational institutions, hospital construction and asphalt.
Contractors pay GST to the civic body, which in turn pays it to the government. Hence, the hiked tax will be recovered from contractors. This means cost of development works will go up from July 18. The PMC spends around Rs 2,000 crore on various development works every year. That means contractors will have to pay Rs 120 crore more GST as per the revised rate. The money will finally be recovered from citizens while adversely affecting development projects in the city.
The chief accounts officer has written to all civic departments to recover GST at the revised rate from July 17. The old bills submitted earlier will be paid as per the old GST rates.
The PMC’s loss
Following the power tariff hike, the civic body will have to pay Rs 10 crore more. It will have to bear another burden of Rs 120 crore on account of the hike in water tax. Now, it will have to shell out six percent more GST on development plans.
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