Kerala waives its GST share and royalty for Ernakulam bypass, Kollam-Sengottai NH projects

Move to give impetus to the two stalled projects. Kerala’s exchequer set to lose about ₹741.35 crore due to its waiver on GST share and royalty on materials and earth required for the construction

The Kerala government had earlier requested the Ministry of Road Transport and Highways to exempt the 25% State share of the land acquisition cost for the Ernakulam bypass and the Kollam-Sengottai stretch on NH-744. The Ministry, in return, sought the GST and royalty waiver to exempt the State from paying 25% of the land acquisition cost.  (image for representation) | Photo Credit: H. VIBHU

Giving an impetus to the stalled projects of the 44-km-long Ernakulam bypass, a greenfield national highway (NH) corridor linking Kundannoor on NH-66 bypass with Angamaly on NH-544, and the Kollam-Sengottai stretch on NH-744, the Kerala government has issued a government order waiving the State’s share of goods and service tax (GST) and royalty on raw materials for the construction of the two road projects.

Kerala’s exchequer is set to lose a sum of around ₹741.35 crore due to the waiver on the GST share and royalty on materials and earth required for the construction of the roads.

The Kerala government had earlier requested the Ministry of Road Transport and Highways (MoRTH) to exempt the 25% State share of the land acquisition cost for the Ernakulam bypass and the Kollam-Sengottai stretch on NH-744. The MoRTH, in return, sought the GST and royalty waiver to exempt the State from paying 25% of the land acquisition cost.

However, the State had been dragging its feet on issuing a formal government order in this regard, although the government decided to grant the waiver sought by the Centre in January 2024.

The 44.7 km-long Ernakulam bypass is aimed at decongesting national highway 544.

The State will lose a sum of ₹424 crore for the Ernakulam bypass alone, while it will lose about ₹317.35 crore by excluding the GST share and the royalty for the 61.62 km-long Kollam-Senkottai greenfield road project. 

With Kerala issuing a formal order in this regard, the work for beginning the construction of the two roads will be speeded up. Also, the authorities can soon issue a 3A notification under the National Highways Act, 1956, to acquire around 287 ha land for the bypass project.

According to Minister for Public Works P.A. Mohamed Riyas, Kerala had already given ₹5,580 crore for the development of national highway 66. “By exempting two more projects from GST share and royalty on materials and earth, two more national highway projects will be taken forward by joining hands with the National Highway Authority of India (NHAI),” said Mr. Riyas.