Himachal Pradesh Chief Minister Jai Ram Thakur on Monday urged the Centre that the GST Council should consider reducing the rate of GST from 18 per cent to 5 per cent on ropeways and other unconventional modes of transportation.
In a letter to Union Finance Minister Nirmala Sitharaman, Thakur stated that the state government had 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 was not environmentally and economically feasible.
It also aims at connecting new places of tourist attraction and exploring new opportunities from a tourism point of view for employment generation and economic growth of the state.
Yet another objective was to provide first and last-mile connectivity as per the requirement across the state, he added.
He stated that the state government had created Ropeways and Rapid Transportation System Development Corporation (RTDC) under the transport department as a single nodal agency for the construction of ropeways and other mass rapid transportation systems.
Therefore, the ropeways will not act merely as a tourist attraction but will also help in providing sustainable means of transport in rural areas besides considerably solving the traffic congestion in these areas.
In addition, the ropeways and other unconventional modes of transportation were not defined separately under the specific entry of GST schedules.
The GST is being levied on this service (9 per cent SGST and 9 per cent CGST) or 18 per cent IGST thereby increasing the freight on this mode of transportation substantially, the CM said.
He further stated that the ropeways were 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 was benefitted from these projects.
He added Himachal was one of the revenue deficit states where the revenue gap was more than fifty per cent.
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, he added.