In a significant pre-election decision, the Maharashtra government has permitted civic bodies to exercise the option of selecting either octroi or the local body tax, Chief Minister Prithviraj Chavan said here Wednesday.
This would set at rest all controversies surrounding the implementation of proposed LBT for Mumbai, though it has already been introduced in around two dozen civic bodies in the state.
The Municipal Corporation of Greater Mumbai (MCGM) has decided to continue with octroi in view of the strong opposition to LBT from the business and trading communities, Chavan told media here.
"The MCGM earns Rs.6000-Rs7000 crore income from octroi each year and is not keen on implementing LBT. The government cannot permit the choice to select only to one civic body, so the same will be applicable to others (local bodies) as well," Chavan declared.
He added that those civic bodies not interested in continuing with LBT should pass a resolution in the general body meeting and send it to the state government for approval.
Chavan denied that he had adopted an adamant attitude towards scrapping octroi and introducing LBT and pointed out that it was an issue pertaining to the financial autonomy of the civic bodies, so they should take a decision on it.
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However, Viren Shah, president of the Federation of Retail Traders Welfare Association, strongly opposed the latest move, claiming it would "ruin business in Maharashtra."
"Traders will get harassed more in inter-city transfer of goods and ultimately customers will get goods expensive in the state," Shah said in a statement.
He alleged that this confusing decision was taken solely on account of the infighting between the ruling Congress and Nationalist Congress Party which would lead to harassment of traders at octroi checkposts and by inspectors in cities which opt for LBT in the state.
The chief minister said that since the Goods & Services Tax (GST) is likely to be implemented within a couple of months, there would be a total overhaul in the taxation systems of local bodies.
He recalled that the BJP-ruled states had opposed the implementation of GST during the Congress-led UPA regime.
"But, now that the former Gujarat CM (Narendra Modi) is the prime minister, the position has changed and he is in favour of GST. We are awaiting its implementation," Chavan said.