State finance minister meets Uddhav Thackeray, seeks GST support

Mumbai: State finance minister Sudhir Mungantiwar met Shiv Sena chief Uddhav Thackeray and sought his support for the Good and Services Tax (GST) bill that will come for passage in a special session of the Maharashtra legislative houses on May 20.

Mr Thackeray has raised key objections regarding sharing of funds with municipalities, especially the Sena-ruled Brihanmumbai Municipal Corporation (BMC). During the meeting, Mr Mungantiwar tried to placate Mr Thackeray so that Sena may support the key bill in the Houses.

Mr Mungantiwar reached Mr Thackeray’s residence ‘Matoshree’ on Monday morning. The Shiv Sena chief had raised objections over the shrinking of revenue sources for BMC if the GST came into being.

Sources confirmed to The Asian Age that the finance minister showed Mr Thackeray the formula of compensation that could be given to BMC after the loss of revenue it will suffer when octroi is abolished.

The finance ministry, after studying the percentage of increase in octroi for the last 10 years, observed that an of average four per cent increase took place every year. Therefore, the state government proposed an eight per cent increase per year in allotting funds to BMC. The number of years for which this increased allotment will continue is still undecided.

However, the government and Shiv Sena are differing on the baseline amount on which the increase in funding will be determined. Sena is asking for the latest collection year i.e. 2016 be taken as the baseline year, so that BMC will get an eight per cent hike on the 2016 octroi collection.