"The Fadnavis government has announced that it would scrap LBT from August 1. It plans to replace it by levying a surcharge on VAT. Our government had examined the option and held meetings with mayors and commissioners of all 26 corporations in the state. All of them had rejected the option saying that such a move would lead to additional burden on taxpayers," Chavan said.
Opposition Congress and NCP in the Maharashtra Legislative Assembly warned the Fadnavis-led BJP-Sena government that it would take to the streets in protest against any new taxes to compensate for losses incurred after scrapping the Local Body Tax (LBT).
Participating in the debate on the budget which was presented by the BJP-led Maharashtra state government last week, Jayant Patil (NCP) and former chief minister Prithviraj Chavan (Congress) warned the government that they would take to the streets in protest against any move to pass on the tax burden to citizens by increasing Value Added Tax (VAT).
Chavan said the Fadnavis-led government plans to levy surcharge on VAT to compensate after scrapping LBT.
"The Fadnavis government has announced that it would scrap LBT from August 1. It plans to replace it by levying a surcharge on VAT. Our government had examined the option and held meetings with mayors and commissioners of all 26 corporations in the state. All of them had rejected the option saying that such a move would lead to additional burden on taxpayers," Chavan said.
"Similarly it will endanger the autonomy of civic bodies.
The surcharge will result in hike of VAT by 15.5 per cent from the existing 12.5 per cent and the burden will ultimately be passed on to citizens. We will not allow the government to pass on the burden to citizens," Chavan said.
Chavan also said that this option could pose a challenge to the 74th amendment of the Constitution of India since civic bodies would lose their right of collection of taxes.
CP's Jayant Patil, the former Maharashtra finance minister, said that the proposed surcharge on input VAT by one per cent and the rise of three per cent on VAT would lead to an additional burden of Rs 7,000 crore on citizens.
He said the people from rural areas would be forced to pay for services and bear the brunt of these measures.
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