The Himachal Pradesh government has urged the Centre that the GST Council should consider reducing the rate of GST from 18 percent to five percent by adding a specific entry related to ropeways and other unconventional modes of transportation in the category of services covered under five percent GST.
In a letter to Union Finance Minister Nirmala Sitharaman, Chief Minister 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 objective behind this decision 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 tourism point of view for employment generation and economic growth of the state. Yet another objective is to provide first and last mile connectivity as per the requirement across the state.
Jai Ram Thakur has said that 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 in the state. Therefore, the ropeways would not act merely as the tourist attraction but would also help in providing sustainable means of transport in rural areas besides considerably solving the traffic congestion in these areas.
The Chief Minister has 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 percent SGST and 9 percent CGST) or 18 percent IGST thereby increasing the freight on this mode of transportation substantially. He said that the ropeways are one of the safest modes of passenger and transport material transportation and are eco-friendly solutions for providing connectivity. Therefore, 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 at large is benefitted from these projects.
He has further mentioned that Himachal Pradesh is one of the revenue deficit states where the revenue gap is more than fifty percent. The setting of ropeways in a big way in the state would attract a large number of the tourists to the state which in turn would help in economic growth and enhancing the revenue receipt of the state 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 in Uttar Pradesh said informed here today that the discussion was held in the meeting to reduce the GST rate from existing 18 percent. He said that on the request of the state, the GST Council sent the matter to the Fitment Committee to re-consider 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.