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Civic bodies can choose between LBT and Octroi: Chavan

In a u-turn from his staunch support to implementation of the Local Body Tax (LBT), Maharashtra Chief Minister Prithviraj Chavan on Wednesday said the civic bodies will now have option to choose between LBT and Octroi.

Talking to reporters here Chavan said since Municipal Corporation of Greater Mumbai (MCGM), commonly known as BMC, has decided not to switch from octroi to LBT and with steep opposition from traders against LBT, government has decided to allow civic bodies to decide for themselves.

“BMC gets Rs. 6,000 to Rs. 7,000 crore income from octroi and it is not interested in switching over to LBT. We cannot give selective choice to one civic body only and the same should be applicable for others as well. Those interested in scrapping LBT and continuing with Octroi should pass a resolution in the general body meeting and forward the proposal to the state government for approval,” Chavan said after the weekly cabinet meeting.

Replying to queries, the chief minister said he was never adamant on implementation of LBT. “After all it is question of the financial autonomy of the local bodies and they have to take a call,” he said.

Goods and services tax (GST) is likely to be introduced in a couple of months and following which there will be a total overhaul in the local body taxation, he said.

Hitting out at the BJP, Chavan said BJP-ruled states had opposed the implementation of GST during the UPA regime.

“Now that the former Gujarat chief minister is the Prime Minister, he has changed position and is in favour of implementation of GST. We are waiting for the GST to roll out,” he added.

He said the issue of demand for scrapping of LBT was in discussion at the government level for the last couple of months. “An option of surcharge on Value added tax (VAT) was examined. But, it was not seen as feasible and practical as Mumbai has steadfastly opposed removal of Octroi and surcharge on VAT has to be levied in the entire state,” Chavan added.

At present, LBT is in force in all the municipal corporations of the state except Mumbai and traders who had earlier demanded scrapping of Octroi and introduction of LBT had started protesting against LBT across the state.

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