Fadnavis government on Wednesday fulfilled a major election promise made to the traders by announcing the scrapping of the Local Body Tax (LBT) from August 1, 2015. However, to compensate for the losses, the government will now impose a surcharge on value added tax (VAT) across the state.
Fadnavis government on Wednesday fulfilled a major election promise made to the traders by announcing the scrapping of the Local Body Tax (LBT) from August 1, 2015. However, to compensate for the losses, the government will now impose a surcharge on value added tax (VAT) across the state.
Finance minister Sudhir Mungantiwar said the government required Rs 6,875 crore to compensate the municipal corporations excluding Mumbai. “The change in tax system will help the state to gain an additional revenue of Rs 643 crore. We have not decided how much percentage of VAT will be increased. We are still working on this,” Mungantiwar said.
State NCP president Sunil Tatkare has reacted strongly to the proposal. “To please a few businessmen in Mumbai, the BJP-led government is putting additional tax burden on the common man. Why should the general public, particularly those from rural areas, share this burden,” he asked.
Opposition leader Radhakrishna Vikhe Patil of the Congress said the budget, instead of offering relief to the common man, is penalising the entire state.
Even the Sena leaders took exception to the government proposal.
“It is not a step in the right direction. The municipal corporations cannot beg before the state government for each and every thing. Earlier there was octroi which was replaced by the LBT. Now, without the LBT, how we they generate revenue,” asked a Sena leader requesting anonymity.
He added, “If the corporation is run by the opposition parties, there is every chance that the ruling party will ignore these corporations. It will leave an impact on the infrastructure development of these cities.”
Senior government officials who were part of the budget preparation said the abolition of the LBT decisions were made several occasions earlier also. “I am not sure on the announced date August 15 the LBT will be abolished in real sense. There is a lot of confusion over levying of additional VAT. We are still working out the modules,” a government official said on condition of anonymity.
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