The Maharashtra government has decided to abolish the Local Body Tax (LBT) within 15 days on petrol and diesel to end the disparity between fuel dealers and other traders.
The decision comes after discussions between the state government and petrol/diesel pump owners over its imposition.
State Finance Minister Sudhir Mungantiwar however said that the government will impose an alternate tax in place of LBT.
"The fuel dealers' contention is that those whose pumps are within the jurisdiction of any of the 25 Municipal Corporations in the state are required to pay the LBT while others are not," Mungantiwar told PTI.
"They say the LBT eats into the businesses of those who pay the tax and hence wanted us to abolish the LBT," he said.
The minister claimed that the fuel dealers are ready to accept the imposition of an alternate tax in lieu of LBT.
"When we met representatives of fuel dealers, they said that they do not have any problem if the government imposes an alternate tax in place of LBT. All they want is parity between all pump owners.
"We have told them that will abolish the LBT within a month's time. But, the state government has decided to make a formal announcement within 15 days," Mungantiwar said.
When asked about the financial implications of the government's decision, Mungantiwar said that abolishing LBT will cost the government Rs 280 crore.
The state government has already exempted traders having an annual turnover below Rs 50 crore from paying LBT across the state from August 1.
According to the government, more than 99 per cent of traders benefited from the decision.
However, petrol and diesel retailers were not considered for LBT exemption.
There are around 800 petrol and diesel pumps within 25 municipal corporations in the state.