The introduction of GST has led to the scrapping of vehicle entry tax (VET) and local body tax (LBT) at cantonment boards. At Pune Cantonment Board (PCB), officials said they face a loss of Rs 110 crore annually with the abolition of vehicle entry tax and local body tax. D N Yadav, PCB CEO, told The Indian Express that the board annually collected Rs 11 crore as vehicle entry tax and Rs 85 crore as LBT. “The Ministry of Defence has written to the finance ministry about the losses incurred. We are now waiting for our share of funds from the Centre,” Yadav said.
From July 1, the three cantonment areas — PCB, Khadki Cantonment Board and Dehu Road Cantonment Board — abolished the vehicle entry tax applicable for tourist vehicles and the local body tax. Officials, however, admit that the cancellation of the tax will create a financial burden on cantonment boards. Even as their funds to run the civic body were limited, the implementation of GST has added to the woes of operating Khadki Cantonment Board (KCB).
Though officials at KCB are yet to meet and decide the way forward, according to primary estimates, authorities say, the loss comes to Rs 6.5 crore every month which they would collect from levying VET. This was one of the major sources of income, given that the board has vehicles entering from both civic bodies — Pune and Pimpri-Chinchwad.
This means that the board will now have to deal without approximate Rs 78 crore loss annually. Earlier, too, the board had to deal with the the introduction of LBT after octroi was abolished in 2013. This had brought them losses to the tune of approximately Rs 18 crore annually, but VET provided some respite.
Officials at Dehuroad Cantonment Board (DCB), too, estimate a loss of Rs 18 crore in the absence of VET and LBT. Officials say the vehicle entry tax here has been majorly hit as the cantonment generated major revenue from heavy vehicles, mostly south-bound, entering their limits.