The Maharashtra government expects the four-tier rate slabs, decided between the Centre and states for the coming national goods and services tax (GST), to help consolidate its position as a prominent centre for manufacturing and logistics.

Manufacturing, engineering, construction and logistics together constitute a third of the gross state domestic product. State finance minister Sudhir Mungantiwar told this newspaper, “There will be growth in manufacturing and logistics. The share of state GST in total GST will be slightly more than what it is today in VAT (value added tax). The gain in services tax as part of the GST will be a total gain for all states.” The higher tax revenue from GST will be used for development of infrastructure, he said.

He noted octroi and local body tax, two major levies, would now be subsumed in GST. The Centre’s assurance on compensation for revenue loss for the first five years is important — the BrihanMumbai Municipal Corporation, for instance, gets Rs 7,000 crore annually through octroi.