Assembly sets August 29 date to ratify GST bill

MUMBAI: The state assembly has decided to hold a day-long special session of the Maharashtra legislature on August 29, to ratify the constitutional amendment to the goods and services tax (GST) bill.

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The finance department made a presentation before the ministers on Monday during which the annual revenue loss because of the GST implementation was pegged at Rs 20,000 crore. Besides the revenue from the Octroi in Mumbai which is about Rs 7,000 crore and Rs 7,000 crore from the LBT, the loss from luxury tax, entertainment, central sales tax, and sugarcane purchase tax is to be another Rs 6,000 crore.

“Few kinds of taxes will now be subsumed and it will lead to the loss. Though the manufacturing states were supposed to gain more in terms of boost to industries, Maharashtra may suffer a setback as taxes will be on the rise for the service industries,” said a finance department official.

The ministers were also informed about the Centre’s promise to the States to compensate for the loss of the first five years after the implementation of the GST regime. Shiv Sena ministers raised queries about the loss to the Brihanmumbai Municipal Corporation because of the Octroi abolition. They also claimed that the civic body will be paralysed once the Octroi was replaced.The cabinet members were also told about the department plan for effective implementation of the GST.

The Centre has convened a meeting of finance ministers of all states in New Delhi on August 30. With the meeting and Pola (the festival of worshipping bulls), which falls on September 1 and 2, respectively, the cabinet decided to hold the meet on August 29. The finance department had proposed that it be held on September 1. The two houses passed the Constitution (122nd Amendment) Bill, 2014 on GST in Parliament, earlier this month. At least half the states were asked to ratify it within 60 days for a notification on the formation of the GST council. It will have a two-third state representation and a one-third representation from the Centre.