Maharashtra is likely to receive around Rs. 15,000 crore in assistance from the Central government to tide over the likely turbulence due to the new Goods and Services Tax (GST) regime. Senior officials said the Centre and State governments are working out a sharing formula before GST is implemented.
Chief Secretary Swadheen Kshatriya told The Hindu that an expert committee putting together the sharing formula is in the final stages of devising an assistance package. “We are hopeful of receiving substantial help from the Central government to tide over the turbulence during this transition phase. Assistance during the transition to the Value Added Tax regime was substantial and helped the State.”
Maharashtra, Tamil Nadu, Karnataka and Gujarat are among the States likely to gain most in service tax revenues once GST is in force. With the Centre promising assistance, loss in revenue for the State, if any, would be neutralised by the assistance package, State finance department officials said.
The State government was keen on implementing GST in April, but has apparently decided to toe the Centre’s line and introduce the new taxation system in July, as announced by Union Finance Minister Arun Jaitley. According to State Finance Minister Sudhir Mungantiwar, Maharashtra had sought to implement GST in Aproil to make calculating tax liabilities easier. “We are certainly advancing the State budget and restructuring the planned and non-planned expenditure sections in the run-up to this regime change,” Mr. Mungantiwar said.
Senior finance department officials said a legal regime is also being prepared for changes to different regulations. “We are confident of making it a success, whatever the new legal framework and changes in law may be,” Mr. Kshatriya said.
In August last year, Maharashtra became the tenth State to ratify the GST Constitutional Amendment Bill during a special session of its Legislative Assembly. The government had said the State government’s autonomy will not be threatened, despite what critics had to say. The Shiv Sena has been resisting GST saying it would lead to a loss of Rs. 7,000 crore in revenue for the BMC, which earns handsomely from Octroi.
The State govt. was keen on implementing GST in April, but went with the Centre’s July rollout decision
