Mumbai: The Maharashtra Legislative Assembly will hold a special one day session on Monday to ratify the Goods and Services Tax (GST) Bill. The Constitution (122nd Amendment) Bill, 2014, on GST has already been passed by the Lok Sabha and the Rajya Sabha. The Bill, seen as the biggest tax reform in a long time, needs to be ratified by at least 15 state legislatures before the President can notify the GST Council, which will decide the new tax rate and other issues.
Shiv Sena, BJP's ally, has demanded direct compensation to BMC and a legal provision to sanction it. “The Sena’s stand has been very clear that we will not allow things that erode the autonomy of corporations,” Shiv Sena President Uddhav Thackeray said Sunday in Party function.
So, it would be interesting to see what stand does Shiv Sena MLAs take in the Assembly and Council. MNS President Raj Thackeray Sunday spoke out against the implementation of the GST regime, claiming it was an attempt to foist central rule on on institutions such as the BMC.
“The issue with GST is how should money be collected and distributed. The ideal way would be to allow corporations to collect money, who would send it to the state and then the Centre. However, now everything is being centralised, with all powers with the Centre. If these corporations do not get money from the Centre on time, they will collapse,” Raj Thackeray said during a press conference in Thane.
The Centre has set a deadline of April 2017 for its rollout. Assam was the first state to ratify the Bill, followed by Bihar. In the 288-member Maharashtra assembly, the Bharatiya Janata Party (BJP) and Shiv Sena (SS) alliance has a majority of 185. With the opposition Congress and Nationalist Congress Party (NCP) in favor of GST, the state legislature is set to ratify the bill unanimously.
Shiv Sena leaders have been vocal saying that abolition of Octroi Duty after the introduction of GST should not hamper the finances of the Brihanmumbai Municipal Corporation (BMC). But though the Shiv Sena has raised objections to GST. The Shiv Sena claims that the BMC will stand to lose around Rs 7,000 crore per annum that it generates from the octroi collection. The Sena, which rules the BMC with the BJP, has demanded direct compensation for the loss of octroi.
Ruling alliance partner Shiv Sena and Opposition NCP are busy discussing with their respective legislators the GST ratification bill which will come up before the Maharashtra legislature on 29 August. A source in the NCP said the party's apprehension was that the new tax regime would fuel inflation in respect of certain goods and services.
The two Houses of the state legislature would meet for a special session on 29 August here and pass a one-line resolution with regard to the ratification of the Constitution Amendment Bill on Goods and Service Tax (GST).
Sena has reservations in particular about the compensation to the Brihanmumbai Municipal Corporation (BMC) which would be losing Rs 7,500-crore octroi annually, largely from the the imported crude oil, after GST rolls out.
Maharashtra Finance Minister Sudhir Mungantiwar had said that octroi compensation would be taken care of when the GST governing council frames the rules.
NCP had a meeting of its legislators at the official residence of Leader of Opposition in the Legislative Council Dhananjay Munde on 28 August. Former Finance Ministers from NCP Jayant Patil, Dilip Walse-Patil and Sunil Tatkare briefed the legislators. Doubts still existed on whether the traders will pass on the tax concessions they would be getting due to the unified tax regime to the consumers, he said.
Senior Congress leader and former state chief minister Prithviraj Chavan has said there are still some concerns which they want the Centre to address.
Chavan said, "We have some concerns, particularly regarding the Revenue Neutral Rate (RNR) or the Rate of Tax of GST. We want the tax be less than 18 percent, otherwise, it will lead to huge inflation, and it will be an anti-people measure. There are some other concerns such as the Dispute Resolution Mechanism etc, and I am sure that the government will address those issues."
Passed by Parliament recently, the GST bill needs to be ratified by at least 15 state legislatures before the President can notify the GST Council which will decide the new tax rate and other issues. The government has set 1 April, 2017 as target date for rolling out GST, considered as the biggest tax reform in the country since Independence.