The Assam government has decided to look closely at the claims of contractors awarded government contracts for GST exemption. The Assam government’s new rules have created a massive backlash among contractors. Contractors complain that the government introduced new rules and imposed conditions or limits just to raise revenue.They have nothing to do with GST law. A meeting presided over by Tax Commissioner Jitu Dale decided the specific ratio of tax exemption for government contracts as per various departments. Also, a mechanism has been put in place to closely monitor contractors claiming tax exemptions in excess of this prescribed limit. It has also been decided that if any contractor is caught using fake GST bills, they will be completely blacklisted from government jobs in future.
Various contractor associations have claimed that the new rules impose administrative rules that are not in the GST Act. The type of project that they believeThe tax exemption really depends on the purchase of goods and their use. So imposing the same rules for everyone is completely illegal and baseless. The contractors have alleged that the government has spent huge sums of money in the name of various welfare schemes especially for women in recent years. Now the government needs additional revenue to run these projects so the burden of collecting additional revenue is being imposed on the contractors in the name of tax cheque.
However, the government has not added new rules to revenue collection. According to the minutes of the government meeting, the main objective is to identify people claiming fake tax exemptions and match them with genuine product consumption. The government has clarified that their claims are trueNo action is being taken against them. Under this new system, the GST department will first identify contractors seeking tax relief above the prescribed limit and then refer the cases to the concerned department for investigation. No action will be taken if these claims are found to be true in the investigation. However, both the Tax Commissioner and concerned department will take legal action against false claims without proper proof.
The government has fixed different tax exemption ratios for different sectors. 70 percent of this is for concrete buildings30 to 40 percent for construction of paved roads, 75 percent for steel bridges, 70 percent for concrete bridges, 60 percent for irrigation projects, 80 percent for power transmission and substation works, 70 to 80 percent for power generation projects with a limit of 7 percent. According to the government, these are only indicative and can be changed by 5 to 10 percent depending on project needs. It is also proposed to include registered tar or bitumen suppliers in this meeting. Henceforth, road contractors will have to purchase these materials only from government approved traders and the works department and GST department will check the authenticity of these materials.
The contractors said they fully support the government’s crackdown on fake bills and fraudulent tax claims. However, imposing government regulations on legitimate tax exemptions would create unnecessary conflicts in the futureLegal costs will increase and delay in completion of government development works. That is why the contractors are asking the government to withdraw these new terms or conditions. Instead, they urged the government to take action against false and fraudulent claims using the rules already existing in the GST Act.