Clearing the decks for the inclusion of Maharashtra in the nationwide unified market, the state cabinet on Tuesday approved the state Goods and Services Tax (SGST) bill.
The bill will be tabled in the three-day special session of the legislature from May 20. Earlier, the Shiv Sena, which controls the cash-rich BMC had apprehensions on the impact of the new indirect taxation regime on its finances as it will also subsume octroi, which is the largest source of revenue for the municipal corporation.
The SGST will subsume indirect taxes like VAT, sugarcane purchase tax, vehicle entry tax, betting tax, central sales tax, octroi and local body tax.
Finance minister Sudhir Mungantiwar said the bill would protect the financial independence of the municipal corporations. “While the Centre is considering 2015-16 as the base year for grant of compensation, we will go by 2016-17 (collections of octroi and LBT) to ensure that civic bodies get maximum funds for development,” he added, stating that the municipal corporations would get a compounded increase of 8% annually in perpetuity.
The compensation will be devolved by the fifth of every month in advance.
Mungantiwar said he had discussed the issue with Shiv Sena president Uddhav Thackeray and added that their suggestions had been incorporated in the bill.
The Centre has already approved laws to enable GST to kick-in from July 1. State governments have to approve state GST laws to enable the change-over.