BMC considers cess of all kinds to cut GST losses
Even as the cash-rich Brihanmumbai Municipal
Corporation readies to present its budget for 2015,
the civic body is considering alternative sources of
income before the proposed Goods and Services Tax
(GST) regime comes into effect in 2016.
Civic officials said the BMC stood to lose an
estimated Rs 15,000 crore in annual revenue once the
GST is implemented.
Municipal Commissioner Sitaram Kunte said, “We are
looking at different options to collect revenue and
have presented a few ideas to the revenue secretary.
"Kunte, along with senior civic officials, also
presented a preliminary model to Chief Minister
Devendra Fadnavis last week, which could be adopted
to cut the losses.
A civic official said, “One of the options to be
considered is to charge a cess for major services
provided by the civic body, like solid waste
management (SWM) and education. Departments that
entail a huge expenditure, for instance the roads
department, will also start charging a cess."
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BMC has set aside Rs 7,774
crore as part of its three-year plan for improving roads
and undertaking repairs. It had allotted Rs 2,685 crore
for education and Rs 2,236 crore for the SWM departments
in the last fiscal. As per sources, the commissioner has
also directed major departments like water, SWM and
roads to look at options for increasing the civic body’s
revenues.
With a revenue target of over Rs 7,700
crore for the current financial year, octroi is one of
the primary sources of income for the civic body, apart
from property taxes.
Officials confirmed that
the introduction of GST will mean that the BMC will have
“no legal rights” to collect octroi. Termed as the
“biggest tax reforms since 1947”, the GST is aimed at
free flow of goods and services within the common market
in the country.
Though the government will
provide for a five-year compensation for possible
revenue loss due to the implementation of GST, civic
officials say it is imperative to look at other sources
of income in the next two years.
“The share that the civic body gets among all other
local bodies can be significantly lower. Also, if a
department spends a huge amount of money in providing
services, it ought to recover payment for these
services,” said another official.
Officials,
however, have confirmed that octroi and property tax
will continue to remain the primary sources of income
for the fiscal 2015-16.
Source:
The Indian Express , dated 20/01/2015. |
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