‘BMC Won’t Have To Lean On State’
Mumbai: Despite doubts raised by the Opposition over a new tax regime’s financial implications for the state’s revenues, the Maharashtra legislature unanimously ratified the Constitutional amendment bill on the goods and services tax (GST) on Monday.
Chief minister Devendra Fadnavis tried to convince the legislative council of no adverse financial implications of the GST on state revenue and that municipal corporations, especially the BMC, will not be dependent on the state for funds.
Fadnavis promised that ground work for transparency and ease will be done before the GST is rolled out in April 2017.
The Opposition’s concern was whether implementing the GST will lead to a dip in the state’s revenue, raise inflation and make the BMC financially dependent on the state.
“The government should ensure that municipal bodies are compensated for revenue loss. The state should especially demand a special package for the BMC, the richest corporation in the country. The revenue collected should be directly given to the BMC rather than it approaching the state government with a begging bowl,” said Congress MLC Narayan Rane. Shiv Sena’s Neelam Gorhe too said the BMC should be compensated for the loss and its share of revenue should be passed to it directly.
GST subsumes 16-18 different taxes. The proposed levy will be a single tax that will cover all levies at the Centre and state levels. It is a value-added tax, which means a levy at each stage of production, sale or consumption will be set off against taxes paid in the previous stage. “Maharashtra is a manufacturing state and the GST will be beneficial to states that are consumers. We have to ensure that our revenue is not hit and the rate of GST should be decided by taking into consideration all these things,” said Dhananjay Munde, leader of the Opposition in the council.
Sources had earlier said the finance ministry would hold consultations on the GST rate —which several states suggest should be upwards of 20% to protect their revenue—as well as other legislations which need to be cleared by Parliament during the winter session.
Former CM Prithviraj Cha- van said the GST rate in Canada, Japan and Malaysia is 5%, Australia 10% and New Zealand15%. “The rate of GST should not be more than 18% as indirect taxes would burdened the poor,” he said.
Fadnavis said under GST, the state government will get a share of service tax. “There is a GST council under the chairmanship of the Union finance minister and finance ministers of all the states as members. This commitee will decide the rate of GST and which items and services are to be kept off taxes and other finer details,” said Fadnavis and added that the net of people under taxation will increase and tax evasion will end, besides bringing in investment.
Source: The Times of India