Pune: PMC Development Works in Limbo: PMC Yet to Receive GST Share of Newly Included Villages
Pune: It has been seven years since the government decided to merge 34 villages in Pune districts that are within the boundaries of Pune Municipal Corporation (PMC) into PMC for their overall development. However, surprisingly, even after these 34 villages have been included in the Municipal Corporation, the Municipal Corporation is not getting a share of the GST income that has been allocated for these villages.
On the other hand, the government is also charging 18 percent GST on the development works undertaken by the Pune Municipal Corporation. Every year, the municipality carries out development works worth Rs 2000 crore and collects Rs 380 crore as GST and other taxes in the government treasury. The large amount of GST tax paid by PMC to the government is directly affecting the revenue and, thereby, the development of Pune.
In 2017, the implementation of GST started in the country by cancelling all taxes. Although tax evasion has been curbed to some extent due to GST, as GST has been levied on food items and even consumer goods, the common man has started to suffer from the subsequent inflation of it.
After the introduction of GST, the Local Body Tax (LBT) in local bodies like municipal corporations was abolished. The local self-government bodies started receiving GST income from the state government as a share of the income of that city. Pune Municipal Corporation is also getting about Rs 2.5 thousand crore income from GST. Although the municipal budget is about ten thousand crore rupees, the PMC is able to generate a revenue of only seven thousand crore rupees.
Even in this short amount, after deducting the revenue expenditure, PMC was left with only around Rs 2000 crore for development works. The PMC has to pay 18 percent GST for these works. Furthermore, 21 percent of the income tax and one percent Cess of the PMC go to the government exchequer. In short, the municipal corporation receives only sixteen hundred crore rupees for development works.
Therefore, it seems that even though the municipal corporation receives funds from the state government for some projects, the money taken from the Pune municipal corporation in the form of tax is being returned to it.
11 villages were included in the municipality in 2017 and 23 villages in 2020. The Municipal Corporation is still not getting its share of GST income generated in these villages. Municipal officials informed that they are actively following up with the state government to address the revenue-sharing issue.