The Kolhapur Municipal Corporation (KMC) is going to receive Rs 10.52 crore from the state government every month in this fiscal towards the revenue losses caused due to the implementation of goods and services tax (GST).
The compensation amount is just Rs 17 lakh more than the amount the KMC received every month during last financial year. The civic authorities had expected increase in the compensation grant by at least Rs 1 crore every month owing to the increase in the expenses towards salaries, pensions and civic management.
The civic authorities claimed that the meagre increase in the grant is due to the decline in the state government’s revenue from the GST. The GST came into effect in July last year and while approving the new tax system the state government has promised the civic bodies to compensate the losses for the five years. The GST subsumed the local body tax (LBT) and octroi, which were the major sources of revenue for the civic bodies.
“The compensation grant has been fixed on the basis of the average monthly revenue collected through LBT for three years prior to the GST coming into effect. The government has assured increase in the compensation every year,” a senior KMC official said.