Maharashtra has coming in the way of goods and services taxes (GST) by not ready to withdraw octroi, which the empowered committee of state finance ministers has proposed to be subsumed within GST.
S Dutta Majumdar, special secretary, Central Excise, and member, Central Board of Excise & Customs, said almost all the states have come to a consensus on the state taxes that has to be subsumed within GST and have broadly agreed on the twin structure of its administration. But Maharashtra has not agreed to withdraw octroi since it would lose heavy revenue.
Maharashtra earns more than Rs 18,000 crore a year from octroi, with Mumbai alone accounting for more than Rs 7,000 crore, a finance ministry official said.Octroi is only taken in Mumbai, Pune and Nasik. ?But there is no way to compromise with Maharasthra?s demand since octroi is a local tax and the empowered committee, as a matter of principle, can only allow some crucial state taxes to be out of GST,? the official said.
However, Asim Dasgupta, head of the empowered committee, earlier said the government was eager to retain states? sovereignty on matters relating to taxation. GST, he said, would not be rolled out without the states coming to a consensus on its administration.
Nikhil Kothari, chairman of Assocham?s expert committee on indirect taxes, said even if Maharashtra doesn?t agree to give up its octroi, it should not come in the way of rolling out GST. Other states, in order to offset the impact of octroi, can impose taxes of their own, which can be kept out of GST. ?State taxes like stamp duty and property tax have been kept out of GST and states can formulate their own taxes on the same line.??