PUNE: With the Lok Sabha approving the Goods and Service Tax (GST) on Wednesday, the Pune Municipal Corporation (PMC) has started analysing the impact of the implementation of the new tax regime that is expected to be rolled out on April 1, 2016.
The GST will subsume excise, service tax, state VAT, entry tax, octroi and other state levies. “The major impact of the GST will be on the financial autonomy of the PMC, which has been collecting taxes and using funds according to its requirements. Now, with the implementation of the GST, the government will withdraw local body tax (LBT), one of the main sources of revenue for the civic body,” said a PMC official. The state government has already decided to scrap LBT from August 1, 2015.
PMC officials said the civic administration was preparing a draft to analyse the impact of the decision on civic finances. Also, the corporation is holding discussions with the elected representatives to augment its revenue sources.
The general body of the PMC recently approved an annual civic budget of Rs 4,479.50 crore for the 2015-16 fiscal and set the LBT revenue target at Rs 1,495.58 crore. But once the LBT is scrapped, the PMC will have to depend on the state to fill this huge revenue gap.
According to the PMC estimates, the city needs an annual budget of Rs 9,828 crore to maintain and develop infrastructure for 32 lakh people. It also faces other challenges like raising Rs 25,000 crore to implement the development plan for the old city areas.