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11 per cent service tax hike
February, 06th 2010

Even as the common man is facing the heat of the ever-rising inflation, the standing committee of the Pune Municipal Corporation on Friday decided to impose 11 per cent hike in service tax structure. The committee also decided to impose steep hike on property tax structure for IT sector and decided to charge octroi on gold and silver on the basis of Value Added Tax (VAT)

The standing committee of the PMC met to decide the new tax structure ahead of the annual civic budget.

Municipal Commissioner Mahesh Zagade had proposed 22 per cent hike in various taxes including road and fire cess while double rates are proposed for water charge. Rates for octroi were also hiked in the draft budget. Municipal commissioner had said that if proposed hike is rejected draft budget will face deficit of Rs 377.87 crore which will directly affect capital works.

" Administration was expecting additional revenue of Rs 379 crores from hike of 22 per cent in general taxes proposed by the municipal commissioner, However the standing committee approved 11 per cent hike which will fetch Rs 181 crore to civic coffers" said standing committee chairman Nilesh Nikam talking to reporters.

NCP leader Anil Bhosale, Congress leader Aba Bagul and Nilesh Nikam said that since last ten years there was no tax hike. " we have not accepted commissioner hike proposal. But we have tried to put minimum burden on citizens. No hike in water is proposed. Also we have ensured that poor people are not burdened with taxes" said Nikam. Entertainment tax on Marathi films, musical shows has been waived off.

While BJP, Shiv Sena and MNS members in the standing committee opposed the hike proposal, Congress and NCP supported the same. The proposal was accepted with 9 against 6 votes. The General Body meeting of the PMC will finally approve the hike before actual implementation.

Water Tax:
No hike on residential use of water is suggested. However the use of commercial water will be costly henceforth. Tax of Rs 33 per unit ( per 1000 litre) was approved by the standing committee. The existing rate for commercial use of water is of Rs 21 per unit. The civic administration had proposed hike of Rs 42 per unit. The overall hike in commercial use of water is of 12 per cent. Commercial establishments like hotel's malls, IT, pubs will face the heat of hike.

Octroi on vehicles with price of more than Rs 10 lakh has been hiked form 3 to 4 per cent. No hike in petrol and diesel has been suggested. Octroi on liquor will be charged on the excise bill of the liquor . " After the discussions with the gold traders association the PMC decided to charge .35 per cent ( 35 paise per 100 rupees) octroi on VAT for gold. Earlier the Pmc charged 2.5 per cent octroi on the total price of gold.

With decision to charge octroi on VAT, the PMC will get additional revenue of Rs 12-15 crore" said Nikam. No hike in octroi for gas, petrol, diesel and daily necessary commodities is proposed. Additional revenue of Rs 145 crores is expected with hike in octroi charges. Privatisation of octroi was also discussed in the committee.

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