Mumbai: Government to waive off SGST for business units in Dharavi after development project starts

SGST is a percentage of tax levied along with an equivalent Central GST on goods and services. SGST is applicable on intra-state supply of goods and services and the revenue goes into the State Government’s coffers.

Ateeq ShaikhUpdated: Tuesday, December 13, 2022, 07:57 AM IST
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PTI

Mumbai: The cottage industry in Dharavi is likely to get financial benefits from the State Government once the project to redevelop Asia’s second largest slum takes off.

The fiscal sop is most likely to come in the form of a waiver of the State Goods and Services Tax or SGST.

SGST is a percentage of tax levied along with an equivalent Central GST on goods and services. SGST is applicable on intra-state supply of goods and services and the revenue goes into the State Government’s coffers.

A senior official involved with the Dharavi redevelopment project said the granular details on how to extend the benefits to the cottage industries in Dharavi are being worked out. This could come as a waiver for commercial units within Dharavi or by way of reimbursement of the SGST paid by the establishments.

The slum colony has a population of more than 12 lakh with almost half operating small-scale businesses across industries and sectors, giving it a unique identity and making it self-sufficient while contributing to the state’s economy.

The small-scale businesses include leather tanneries, footwear, garments, pottery, fried snacks, other edibles, plastic recycling, aluminium brick making, metal scrap recycling, electronic waste segregation and recycling, screen and block printing and fabric dyeing.

Before beginning the ground work, a special purpose vehicle will be formed with Maharashtra holding 20% equity and the rest with bid winner Adani Properties. Once the project execution takes off, the Government plans to roll out the concession to the affected commercial units.

“Their businesses may get impacted during the project execution as they will have to relocate from where they have been operating for decades,” the official explained. “The Government may provide some cushion to reduce the impact in the form of SGST relief."

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