Itanagar, Apr 23: The All Arunachal Contractor’s Welfare Association (AACWA) has raised concerns over revenue leakage from state exchequer due to the continued exemption of trade licence and Goods and Services Tax (GST) registration requirements in tender documents floated by central government departments and public sector undertakings (PSUs) operating in Arunachal Pradesh.
In a representation submitted to the secretary of the department of trade and commerce, the AACWA urged the state government to immediately issue an official notification mandating the inclusion of valid Arunachal Pradesh-based trading licences and GST registration certificates as eligibility criteria in all tender documents issued by central agencies and PSUs within the state.
According to the association, large-scale infrastructure and developmental projects being executed by agencies such as the National Highways & Infrastructure Development Corporation Limited (NHIDCL), National Highway Authority of India (NHAI), Central Public Works Department (CPWD), Indo-Tibetan Border Police (ITBP), Border Roads Organization (BRO), and public utilities such as NHPC and NEEPCO are often awarded to firms based outside the state. These firms, the AACWA alleges, operate without obtaining a trade licence from the local authorities or registering for GST in Arunachal Pradesh, thereby depriving the state of both licensing revenue and the 1 per cent State GST component.
“Many of these contractors are registered in other states and remit GST liabilities there, while executing large-scale projects in Arunachal Pradesh. This results in substantial loss of potential state revenue and undermines the financial autonomy of the local administration,” the association noted.
AACWA further argued that these practices contribute to systemic subcontracting, where the principal contractors, often from outside Arunachal Pradesh, sublet work to local entities. However, the fiscal benefits of the projects, particularly in terms of tax realisation, remain tied to the state where the principal firm is registered.
Calling it a structural deficiency that needs urgent redressal, the association maintained that enforcing state-specific licensing and GST registration requirements would not only enhance transparency and accountability but also support local contractors and increase the state’s internal revenue.
AACWA urged the department to act in coordination with all executing agencies and regulatory departments to institute a uniform policy to prevent future revenue losses and ensure compliance with state taxation frameworks.
The demand reflects broader concerns about equitable policy enforcement and fiscal federalism in states with a high dependency on central projects for infrastructure and economic development.
