Urban bodies may be allowed share in VAT
Urban local bodies could do away with octroi and instead be given a share in the Value Added Tax imposed by the state government, a research paper on municipal finance prepared by the Reserve Bank of India said.
By PTI |
MUMBAI: Urban local bodies could do away with octroi and instead be given a share in the Value Added Tax imposed by the state government, a research paper on municipal finance prepared by the Reserve Bank of India said.
"The search for a substitute for octroi may perhaps end with a formulae-based share for the ULBs in the Value Added Tax," the paper said on Monday.
The study, prepared by Department of Economic Analysis and Policy in RBI, said the size of the municipal fiscal sector in India is very small compared to many developed and developing countries.
It said municipal finances need to be strengthened and suggested a host of levies like vacant land tax, taxation of central and state government properties, motor vehicle tax or a share from the same, betterment levy, a surcharge on stamp duty on registration deed, advertisement tax be considered as part of the scheme of revenue assignment to ULBs.
"The search for a substitute for octroi may perhaps end with a formulae-based share for the ULBs in the Value Added Tax," the paper said on Monday.
The study, prepared by Department of Economic Analysis and Policy in RBI, said the size of the municipal fiscal sector in India is very small compared to many developed and developing countries.
It said municipal finances need to be strengthened and suggested a host of levies like vacant land tax, taxation of central and state government properties, motor vehicle tax or a share from the same, betterment levy, a surcharge on stamp duty on registration deed, advertisement tax be considered as part of the scheme of revenue assignment to ULBs.
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