Published On : Mon, May 22nd, 2017

Maharashtra Assembly passes GST Bill

Mumbai/Nagpur: The state assembly unanimously cleared two of the three bills under the Maharashtra Goods and Services Tax (Act) on Saturday, the first day of the three day special session to ratify the central GST bill.

One of the bill was the Maharashtra Goods and Service (compensation to local bodies) Act, 2017, under 27 municipal corporations in the state will compensated for their revenue loss once the new tax regime is introduced. The compensation will be made every month on or before the 5th and the compensation will increase at the rate of 8% every year.

Under the bill, the BMC which is the only municipal corporation in the entire country to still levy octroi and will have to be compensated for the loss of revenue as octroi will be subsumed under GST. And the remaining 26 municipal corporations will be compensated for the loss in revenue as GST will also subsume their right to collect the local body tax.

The issue of compensation to the BMC was a bone of contention for a very long time, the Shiv Sena that rules the BMC was opposing GST over no clarity about the rate of compensation and the time to transfer the funds. However, Shiv Sena on Saturday backed the bill.

According to finance minister Sudhir Mungantiwar the BMC generates Rs 7200 crore from octroi and will have adequately compensated for the loss of revenue. Mungantiwar also said that every state is taking 2015-16 as the base year to calculate the compensation under GST, but Maharashtra is going to take 2016-17 as the base year.

“Initially there was no provision for compensation for octroi loss as this is special only to Mumbai. We raised the demand in the GST council and the centre agreed to give compensation. We will ensure that all the urban local bodies are adequately compensated and their financial independence is not compromised,” said Mungatiwar.

Another second bill on compensation to local authorities, and then a bill on existing state laws that are to be repealed when the MGST comes into effect from July 1.

Under which 11 Acts and its sub-sections like the Maharashtra motor vehicle act, Maharashtra state tax on professionals, Maharashtra entertainment tax, have been amended to delete existing rules to accommodate MGST.

<iframe src=”″ width=”400″ height=”400″ style=”border:none;overflow:hidden” scrolling=”no” frameborder=”0″ allowTransparency=”true” allowFullScreen=”true”></iframe>