Railway contractors to go on nation-wide strike tomorrow over GST rates hike

Indian Railway Infrastructure Providers Association (IRIPA), a body representing contractors working on infrastructure projects with Indian Railways has threatened to go on strike from tomorrow, over high Goods and Service Tax (GST) rates, a media report said.

IRIPA claimed that high GST rates on old contracts were adversely affecting those in the business. They also said that there is still no clarity on how GST rates will be implemented on old contracts. Moreover, contractors have still not received any payments since the GST rollout on July 1, due to the confusion, as reported by The Indian Express. 

As per the report, the contractors association, will go on strike on August 20 which will affect 15 major infrastrucural projects in Maharashtra state. 

Earlier, the contractors had to pay maximum 4% service tax depending on the state in which project was being carried out. However, post GST, 18% rate was imposed. Later, the Railways had promised to cut it to 12% but, no clarty on the same was provided. 

Quoting Kulmeet Singh Chhabra, core committee member of IRIPA, the report said, “The tax has gone up from 5% Value Added Tax (VAT) to 12% GST. Most construction materials and the special equipment we need now attract 18 and or 28% GST. This has increased the operational costs of our ongoing projects. It is simply not possible for us to cover that cost."

Further, IRIPA also mentioned that they hope government will react to this strike immediately and "not force us to do something which will adveresely affects railway operations across the country."

According to a report by The Times of India, since July 1, around Rs 1 lakh crore railways project has been slowed down or completely stopped. 

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