Chief minister Prithviraj Chavan, had announced on Saturday that Octroi would remain until centres' Goods and Service Tax is introduced in the next two year. The state will not impose local body tax (LBT) without the consent of all stakeholders. He also said that LBT will stay as an alternative source of revenue for other municipal bodies.
Considering the demands of traders, Chavan has provided relief to them by announcing that LBT will be collected through sales tax authority instead of the municipal bodies. In a reply given in the Legislative Council, Chavan said that Municipal Corporation of Greater Mumbai (MCGM) will stick to Octroi and the state will not forcefully impose LBT. Meanwhile, LBT will continue in state until an unless and alternate option comes through from the discussion with trade federations.
Congress MLC Sanjay Dutt, raised the LBT issues through calling attention motion. In a reply, Chavan said, "LBT Act is not sanctioned during my tenure. I am just implementing the decision of my predecessor. LBT is an account-based tax and implemented by traders demand."
He further said, "Out of 26 corporations, LBT exists in 25 corporations except Mumbai. The ruling Shiv Sena – BJP at MCGM and the municipal commissioner had said that they want to continue with Octroi," said Chavan, adding that, "Half of the revenue collected in civic exchequer is from Octroi on petroleum products."
Out of total revenue from various municipal bodies, 50% is deposited by MCGM. Hence, it will be unfair to impose surcharge on value added tax and make it compulsory to accept it.
Mr Chavan said, "We are considering suggestion made by Maharashtra Economic Development Corporation (MEDC)."