MUMBAI:The Maharashtra government will have to suffer a loss of Rs 20,000 crore if the Goods and Sales Tax (GST) does not come into existence from April 1, 2016.
The cash-starved Maharashtra government is already set to lose revenue up to Rs 14,000 crore after it scrapped the Local Body Tax (LBT), levied on the traders, in the state from August 1. The LBT, applicable in the jurisdiction of 26 Municipal Corporations, excluding Mumbai, was a big source of revenue for the civic bodies.
The state government was hoping that it will recover the lost revenue once the GST is passed by Parliament.
“The Union government will give us Rs 14,000 crore this year. So we are not worried till March-end. But if the GST does not come into existence from April there will be a huge deficit in the state’s revenue,” said a senior official with the state Finance Department.
Chief Minister Devendra Fadnavis admitted that the state will have to lose Rs 20,000 crore revenue from next year if the GST were not introduced. He, however, claimed that there will not be any financial problems for the civic bodies. “We have empowered them to raise their revenue in a manner suitable to them,” he said.
Fadnavis also toed Union Finance Minister Arun Jeitley’s line, blaming the Congress for creating roadblocks in the GST’s path in Parliament. “The Congress has given priority to its first family instead of the country. It is true that the Gujarat government had blocked the GST. It was correct because the GST in its earlier form was not in the interest of Maharashtra. There was unanimity on the GST only after the Panel adopted a clause to allow the manufacturing state one per cent tax. Being a manufacturer as well as consumer state Maharashtra will be the biggest beneficiary of the GST,” he said.
State Congress chief Ashok Chavan dismissed Fadnavis’ allegation. “The whole country knows that it was us who mooted the idea of GST. The BJP is misleading the country,” he said.