Maharashtra Legislature ratifies GST Bill

PTI

The Maharashtra Legislature today unanimously ratified the Goods and Services Tax Constitutional Amendment Bill, joining a clutch of states which have already approved the legislation that will pave the way for roll-out of a single and unified tax system in the country.

Both Houses of the legislature met for a special one-day session to approve the Constitution (122nd Amendment) (Goods and Services Tax) Bill, passed by Parliament earlier this month, during which Opposition and treasury benches traded charges.

Maharashtra, an economic powerhouse, became the 10th state to ratify the crucial legislation, billed as the biggest tax reform since Independence.

Before unanimous ratification, during a discussion Congress and NCP-led opposition targeted Prime Minister Narendra Modi for his resistance to the same Bill in 2011 when he was the Gujarat Chief Minister.

Chief Minister Devendra Fadnavis sought to allay fears pertaining to the new tax regime expressed by some parties.

Replying to a debate in the Council, he said under the new law, the state is empowered to set aside tax revenue or allocate funds from its consolidated funds to civic bodies like the Brihanmumbai Municipal Corporation (BMC).

Under GST, octroi will be abolished, depriving BMC of a key source of revenue.

Referring to apprehensions expressed by Shiv Sena, Congress and NCP about impact of GST on BMC's octroi revenue, Fadnavis said, "Octroi is paid to BMC by the rest of the State as petroleum companies do not pay the same. Now the tax shall first come to the state, which in turn, will pass it on to the BMC." 

Fadnavis said the state government and the BMC can set up an institutional mechanism for devolution of taxes.

Rebutting Opposition charge against PM, he contended Modi, the then Gujarat Chief Minister, opposed the Bill brought by the Congress-led UPA government as it provided compensation to states for first three years only (for loss of revenue) and that too in 100, 75 and 50 per cent ratios.

"Modi (as Prime Minister) ensured the Centre gave 100 per cent compensation to states and that, too, for first five years." 

He maintained it was at Modi's instance the clause of arbitration by a Supreme Court judge on disputes in the GST Governing Council was removed, upholding the supremacy of Parliament.

The Chief Minister said Modi had opposed including the tax rate structure in the Constitutional Amendment Bill as it would have meant the Government having to move Parliament each time changes had to be made in structure of the levy.