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We can cope with GST losses, don’t need help from Centre, says Maharashtra finance minister
MUMBAI CITY NEWS: Maharashtra won’t have to ask Delhi for compensation in 2 years: state finance minister
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After the Maharashtra legislature on Monday unanimously cleared the Goods and Services Tax (GST) ratification bill after two days of discussion, state finance minister Sudhir Mungantiwar said that the state was capable of dealing with revenue losses and did not need any compensation from the Centre after two years. He further said that the state’s revenue was likely to go up by 2% with the introduction of the GST.
The state government had called a three-day special session of the legislature from Saturday to discuss and ratify the GST. The new tax will bring the country’s economy into a common platform and eliminate a string of central and state taxes. Under this, the Centre and the states will also collect the same amount on goods and services.
Mungantiwar said that Maharashtra’s economy was strong enough to deal with the losses from the GST and would not need any help from the Centre after two years. “With the GST, the state revenue is expected to increase by 2%, which comes to around Rs50,000 crore. After two years, we won’t need any compensation as there won’t be any revenue loss,” Mungantiwar said.
To substantiate his claim, he said that the state’s tax revenue was Rs87,000 crore in 2011-12, which is expected to reach up to Rs1.53 lakh crore in 2017-18. The non-tax revenue was Rs8,168 crore in 2011-12, which is expected to go up Rs20,156 crore in 2017-18.
He was replying to the concerns raised by the opposition, which said that Maharashtra was likely to incur an estimated loss of Rs15,000 crore with the GST coming into effect. With the Centre to compensate the state for the next five years, the Opposition on Sunday said that the state government was unlikely to be in a position to bear this additional burden after the stipulated time because of the losses.
Mungantiwar also said that it was baseless to assume that eating at restaurants was to become expensive with the implementation of the GST, keeping in mind the existing taxes. “Under the GST, small restaurants having an annual turnover of Rs50 lakh will be charged 5%, AC restaurants will be charged 12% tax and AC restaurants serving liquor will be charged at 18%. I believe this will not affect your finances when eating out,” he said.
