GST Impact On Infrastructure: New Tax Takes Toll On Award Of Road, Railways, Power Projects

GST Impact On Infrastructure: New Tax Takes Toll On Award Of Road, Railways, Power Projects

The value of projects awarded to build roads, railways, mining infrastructure, irrigation systems, water supply systems and power transmission lines fell 20.5% year-on-year to Rs 1.38 lakh crore in April-October 2017. This was even as the amount for which tendering took place rose 2.1% y-o-y to Rs 4.24 lakh crore during the seven-month period. Industry executives and experts said the introduction of the goods and services tax (GST) slowed award of infrastructure projects during this period. Vimal Kejriwal, MD & CEO, KEC International, told FE that while the first quarter was a good for tenders and projects awarded, issues related to GST from July onwards put a brake on both activities. He said, “Many tenders got postponed and re-tendered. But we are now beginning to see decisions being taken on these. We are seeing tenders getting issued by PowerGrid to railways. I believe the fourth quarter will see an acceleration in award of projects.” Read More…

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