New Delhi: Octroi will go in Mumbai once the Goods and Services Tax (GST) comes into effect, in all likelihood from next April 1.

Union Finance Minister Arun Jaitley on Monday dropped enough hints that the Brihanmumbai (Greater Mumbai) Municipal Corporation (BMC) will lose right to levy the octroi that earns it the highest revenue.

He told the Lok Sabha, in reply to questions during debate on the GST-related Constitution amendment bill, that he had spoken to Maharashtra CM Devendra Fadnavis, who assured him that no municipality will suffer as he would subsume devolution to the municipals, including BMC, in the State GST law to be passed by the state legislature.

Jaitley said nobody should worry about the municipal revenue as Article 243X on the funds of the municipalities will remain intact. The Shiv Sena MPs were not happy with Jaitley”s proposition since its party in power in the BMC would lose the biggest tax power by way of octroi and it would have to depend on the grants from the state government. Today the BJP and the Shiv Sena are partners in the coalition government in the state but what happens if they part company, they asked.

Mumbai is among very few cities in the country that have so far insisted on levying octroi to remain free from any control of the state government. Most of the municipalities have, however, abolished it years ago.

BMC should be kept out of GST: Mayor

Meanwhile, even though BJP ally Shiv Sena is supporting the GST Constitution Amendment Bill in Parliament, the Sena-ruled BMC wants the civic body to be kept out of the indirect tax ambit.

“Keeping in mind the fact that Mumbai is the country’s financial capital, BMC’s jurisdiction should be kept out of the GST ambit,” said a statement issued by the civic body on the behalf of city Mayor and Sena politician, Snehal Ambekar.

Ambekar chaired a meeting of the Maharashtra Mayors’ Council at her residence in Dadar in Central Mumbai on Sunday. The Council comprises 26 Mayors across the state.

The meeting was arranged by ‘Akhil Bharatiya Sthanik Swarajya Sanstha’ and was attended by 12 Mayors from across the state.

“With the funds collected through direct revenues and other taxes, BMC executes a number of infrastructural projects and schemes. (However), the GST will result in delays in getting grants from the concerned government, which will further delay these projects,” the statement said.

Ambekar also appealed to Centre to assign more “administrative powers” to Mayors in Maharashtra. “In so many other countries, the Mayor is vested with administrative and financial powers to execute the projects. However, here in Maharashtra there is no such power given to the Mayor,” the statement added.

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