Maharashtra government is mulling over a proposal to get local body tax (LBT) collected all over the state, except Mumbai, through the sales tax department instead of municipal corporations.
While in Mumbai, octroi would continue due to the steadfast opposition of the Brihanmumbai Municipal Corporation (BMC) to any tax other than octroi. "We would change the collection machinery to remove the irritants in the collection process but the incidence of tax would be exactly the same," Finance Secretary Sudhir Shrivastava said. The state government was earlier considering levying a surcharge on value added tax (VAT) in place of the LBT. But, since Mumbai wants to continue with octroi, the proposal could not materialise.
Chief Minister Prithviraj Chavan last week said the surcharge on VAT as an alternative was acceptable to the state government, but the BMC was not ready to accept it. "Surcharge on value added tax is not workable unless Mumbai is on board," Shrivastava said. "The Brihanmumbai Municipal Corporation is comfortable with octroi and they don't want to be disturbed. The officials in the corporation feel that there is no agitation against the current tax in the city, so they should continue with the system," he said.
A committee headed by Shrivastava will submit its report regarding changes in LBT to the government soon after which an Ordinance would be promulgated, the Chief Minister had said last week.