Maha Legislature session to consider ratification of GST Bill-:- Equity Research

A special one-day session of Maharashtra Legislature to consider ratification of the Goods and Services Tax (GST) Constitutional Amendment Bill passed by Parliament, got underway here today. In the Assembly, Finance Minister Sudhir Mungantiwar tabled a resolution to ratify the GST Bill, while Minister of State for Finance Deepak Kesarkar introduced it in the Council. In the 288-member Maharashtra Assembly, the Bharatiya Janata Party (BJP) and Shiv Sena (SS) alliance has a majority of 185. With the Opposition Congress and Nationalist Congress Party (NCP) in favour of GST, the State Legislature is set to ratify the Bill unanimously. "It was passed by all parties in Parliament and I do not see any reason why it should not be ratified unanimously in Maharashtra," Mungantiwar had said, ahead of the special session. Senior NCP leader and former Maharashtra Finance Minister Jayant Patil said the party would support the legislation but it also expected a discussion on the provisions in the Assembly. "It is a Bill and there has to be a discussion before it gets ratified," Patil said. The 122nd Constitutional Amendment Bill passed by Parliament needs at least 16 states to ratify it before it could be sent for Presidential assent. So far, nine states including three states not ruled by the BJP-led National Democratic Alliance (NDA) have ratified the Bill. Maharashtra, India's leading manufacturing state with a large service sector economy as well, is estimated to suffer a revenue loss if the GST rate is capped at 18 percent. "There will be revenue loss only on account of Octroi duty in Mumbai getting subsumed under GST. More revenue will be lost because GST will replace other taxes like central sales tax, value added tax, entertainment tax, and some other minor taxes," an official said. The government has set a deadline of April, 2017 for its roll-out. GST aims to do away with multiple-tax regime on goods and services and bring them under one rate. It will alter the present system of production-based taxation to a consumption-based one. While manufactured consumer goods will become cheaper as the incidence of excise duty and VAT will come down from 25-26 percent at present, the cost of services would by and large, go up from the present 15 percent levels.