The Builders Association of India (BAI) on Sunday urged the Central and State governments to reduce Goods and Service Tax (GST) from 12 to 5 % for projects which do not offer scope for claiming input tax credit.

Speaking at the Builder’s Day function organised by Tiruchi chapter of BAI here, H.N. Vijaya Ragava Reddy, national president, BAI, said that some projects involved no purchase of building materials thereby denying the chances of availing input tax credit.

They were all mostly related to desilting of lakes, rivers and waterbodies. Since they were all labour-intensive, there would be no scope for deducting input tax while paying GST on labour centric projects. The existing 12 % GST on labour centric projects had not only affected the builders but also the farmers, who depended on water bodies for irrigation. The BAI had taken up the issue to the Central government on reducing the rate. While stating that the GST council had brought down the rate on input credit projects from 18 to 12 %, Mr. Reddy said that the decision had brought a small relief to builders. It was important for the Governments to protect the construction industry as it was one of the largest job providers to the organised and unorganised sectors in the country.

R. Murugesan, president, BAI, Tiruchi chapter, said that the spiralling prices of sand had badly hit the construction industry in the State.

Former BAI presidents, R. Radhakrishnan, A.K. Yusuf, former Lions district governor, Coimbatore, V.M. Alagesan, R. Saravanan, secretary, BAI, Tiruchi, and J. Jayaraman, president, builders day festival committee, spoke.