HIMACHAL WANTS GST REDUCED ON ROPEWAYS AND UNCONVENTIONAL TRANSPORTATION

The Himachal Pradesh government has urged the Centre that the GST Council should consider reducing the rate of GST from 18% to 5% by adding a specific entry related to ropeways and other unconventional modes of transportation in the category of services covered under 5% GST.

In a letter to Union Finance Minister Nirmala Sitharaman, CM Jai Ram Thakur has apprised that the state government has taken a decision to use the concept of ropeways for transportation of passengers and goods throughout the state. The aim is to connect the left out habitations where construction of roads is not environmentally and economically feasible. It also aims at connecting new places of tourist attraction and exploring new opportunities from the tourism point of view for employment generation and economic growth of the state. Yet another aim is to provide first and last-mile connectivity as per the requirement across the state.

CM Thakur has said that the Himachal government has created ropeways and Rapid Transportation System Development Corporation (RTDC) as a single nodal agency for construction of ropeways and other mass rapid transportation systems. Thus, the ropeways would also help in providing sustainable means of transport in rural areas besides considerably solving the traffic congestion. The CM has also added that the ropeways and other unconventional modes of transportation are not defined separately under the specific entry of GST schedules. The GST is being levied on this service (9% SGST and 9% CGST) or 18% IGST thereby increasing the freight on this mode of transportation substantially. He said that the ropeways are safe and eco-friendly. Thus, to make ropeways projects financially viable for mass transit, the GST rates on ropeways and other unconventional modes of transportation system should be equated with conventional road transportation so that the investments in the ropeways projects are received and the public is benefitted from these projects. He added that Himachal is one of the revenue deficit states where the revenue gap is over 50%. The setting of ropeways in a big way would attract a large number of tourists which would help in economic growth and enhancing the revenue receipt which might help in reducing the revenue gap. Additional Chief Secretary, Excise and Tax department J.C. Sharma, who attended the recently held meeting of the GST Council at Lucknow informed that the discussion was held to reduce the GST from the existing 18%. He said that the GST Council sent the matter to the Fitment Committee to reconsider the proposal in consultation with the states. The departments of state tax and excise and transport would make a detailed presentation before the Committee in favour of the proposal.