Ahmedabad: Faced with high rate of Goods and Services Tax (GST), Gujarat Contractors Association (GCA) has opposed GST and called a 'mahasammelan' (mega gathering) in Ahmedabad on June 30 to express their protest and chalk out future course of action.The association had held a meeting on June 21 and unanimously decided to oppose the new GST structure."We will decide the future course of action at the mahasammelan. We will also discuss the implications of GST and its impact on the construction industry," said Arvind Patel, president, GCA, which has 2,500 members who only take up government contracts..These contractors, who only take up contract works tendered by both state and central governments, say that the new tax structure will put additional burden of 8%-12% on existing government contract works with GST imposed at the rate of 18%. "All contracts like that of road building given by central government have a 'change in law' clause, which allows contractors to claim reimbursement of differential tax burden," said Patel.He pointed out, "Contracts awarded by the state government do not have any such clause." In absence of this clause, Patel said that contractors will have to shell out 10% more on currently running projects once GST comes into effect. "At present, we pay 7-8% taxes including VAT," Patel said, adding, "We operate with 5%-7% margins and cannot bear 10% additional tax on account of GST. "The president of GCA went on to say that ongoing projects will be hampered with such high GST rate. "We have already represented to the central government and will also approach the state government ministers," he said.

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