Himachal Pradesh pushes for 5% GST from 18% on ropeways
The Himachal Pradesh government has requested 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, chief minister Jai Ram Thakur said the state government has taken a decision to use ropeways for transportation of passengers and goods throughout the state, as in some places construction of roads is not environmentally and economically feasible. It also aims to explore new tourism opportunities. Yet another objective is to provide first and last-mile connectivity according to the requirement of the state.
CM Thakur said the Himachal government has created ropeways and rapid transportation system development corporation (RTDC) under the transport department as a single nodal agency for construction of ropeways and other mass rapid transportation systems.
He also added that the ropeways and other unconventional modes of transportation are not defined separately under specific entry of GST schedules. The GST is being levied on this service (9% SGST and 9% CGST) or 18% IGST, increasing the freight on this mode of transportation substantially.
The CM further mentioned that Himachal is one of the revenue deficit states where the revenue gap is more than 50%. The setting of ropeways would attract a large number of tourists to the state, which in turn would help in economic growth and enhancing the revenue receipt of the state.
Additional chief secretary, excise and tax department, who attended the recently held meeting of the GST Council at Lucknow in Uttar Pradesh said the discussion was held in the meeting to reduce the GST rate from the existing 18%. He said on the request of the state, the GST Council sent the matter to the fitment committee to reconsider the proposal in consultation with the states.
