The Shiv Sena controls the BMC, which is India's richest civic body, and the onset of the GST regime will see octroi, which is collected by it being subsumed along with other indirect taxes.
In a bid to assuage fears of the Shiv Sena on the impact of the Goods and Services Tax (GST) on the autonomy of the Brihanmumbai Municipal Corporation (BMC), finance minister Sudhir Mungantiwar met Sena president Uddhav Thackeray on Monday.
The Shiv Sena controls the BMC, which is India's richest civic body, and the onset of the GST regime will see octroi, which is collected by it being subsumed along with other indirect taxes.
The Centre has already approved laws to enable GST to kick in from July 1. State governments have to approve state GST laws to enable the change-over and the Maharashtra legislature will hold a three-day special session from May 20 to approve the state GST bill.
Uddhav had earlier warned that the Shiv Sena will have to reconsider its support to the bill if the new system affected the autonomy of the municipal bodies.
Speaking after his meeting, Mungantiwar said the state government will compensate the BMC for the loss of around Rs 7,000 crore that it receives from Octroi, which is its principal source of revenue.
Moreover, an annual rise of a certain percentage will be given, which will be incorporated into the law. Industries minister and senior Shiv Sena leader Subhash Desai said Mungantiwar had agreed to the party's demands and added that the financial health and stability of the Mumbai civic body were important when it came to adding infrastructure and solving civic issues.
Mungantiwar and Uddhav are likely to meet again on Tuesday to discuss the proposal. The state finance department will make a presentation about GST and its implications before the legislators from both houses on Tuesday.
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