PMC may lose revenue due to GST

Ashish Jadhav
Saturday, 15 July 2017

According to the PMC, the government considered the financial year 2015-16 as the base year for calculating the grants in the form of GST for the PMC, and the first share of that, of Rs 138.30 crore, was already paid to the PMC on July 4. 

PUNE: Although the Goods and Services Tax (GST) replaced the Local Body Tax (LBT) in Pune Municipal Corporation (PMC), in the new tax regime, the PMC might lose its revenue, as the government considers only 8 per cent hike per year when it comes to paying the share in GST to the PMC, while the average hike in LBT is 10 per cent to 12 per cent per year. 

According to the PMC, the government considered the financial year 2015-16 as the base year for calculating the grants in the form of GST for the PMC, and the first share of that, of Rs 138.30 crore, was already paid to the PMC on July 4. 

Speaking to Sakal Times, head of the LBT department, Dnyaneshwar Molak said that there is a provision in the act that by the 5th of every month, the grants (GST) will be paid to the PMC suo-moto by the government, without fail. “Till March next year, the government will keep paying Rs 138.30 crore every month,” he said. 

The total LBT revenue for the year 2015-16 was Rs 1,565 crore and considering the 8 per cent hike for the year 2017-18, the PMC would get a total of Rs 1,690 crore for the current financial year. “It is difficult to predict whether the replacement of the LBT with the GST would really have an adverse impact or positive impact on the PMC’s revenue collection, but the average annual hike is 8 per cent only, whereas the average hike in LBT every year was 10 per cent to 12 per cent,” Molak said. 

He also said that the replacement of LBT with GST would save manpower of the PMC and in future, all the staff of the LBT department will be transferred to other departments. “At present, we have 87 staffers. When the octroi was replaced with the LBT, over 300 staffers were transferred to other PMC departments,” Molak said. 

When asked about till when the LBT offices will run, Molak said that until the next one year they will have to function, as they have to assess the returns filed by the traders in LBT regime.

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