It appears the Bharatiya Janata Party’s (BJP) loss in the Bihar polls will have a fallout in Maharashtra.
It appears the Bharatiya Janata Party’s (BJP) loss in the Bihar polls will have a fallout in Maharashtra. The BJP-led National Democratic Alliance’s dream of getting the majority in the Rajya Sabha has been dashed, and along with it all hopes of the Goods and Service Tax (GST) bill getting approved. Without the GST, the state government will have to incur losses of over Rs 6,000 crore and chief minister Devendra Fadnavis is thinking of imposing a new tax regime.
Maharashtra had abolished the Local Body Tax (LBT) assuming that the Centre would bring the new GST.
The Maharashtra government has already taken a burden of Rs 4,210 crore for a period of seven months from August 2015 to March 2016 as grants to the local bodies for abolishing the LBT. But the GST’s uncertain future is forcing the state government to think about a new tax.
While abolishing LBT, finance minister Sudhir Mungantiwar had said in lieu of the exemption from tax, the government would impose a surcharge on value added tax (VAT) till the GST gets implemented from April 1, 2016. But without majority in Rajya Sabha, the GST is unlikely to get approved.
“Also, if it gets approval, the GST bill will need a nod from at least 15 states before its implementation, which is also a tough task for the Centre. Hence, there are chances that the state will come up with a new tax to compensate the LBT else the state’s finances will collapse,” an official from the finance department said.
The state is already reeling under debt of Rs 3 lakh crore and battling to make ends meet.
The state government has already attributed the revenue losses to various welfare schemes initiated for farmers. However, the opposition has cried foul, giving a list of schemes closed down by the government. A recent effort was made to raise Rs 1,600 crore by increasing taxes in the middle of the year. The new tax will pinch the pockets of people already embattled by inflation.
