Monday, April 15, 2013

Lump sum Payment of Local Body Tax

There is a Lump Sum payment scheme in LBT Rules similar to what we have composition scheme in Service Tax.

This is governed by Rule 27. Below are the bare wordings of the provisions of the rule.

See also : Lump Sum payment explained

Lump  sum Payment of Local Body Tax.-
(1) Subject  to the provisions of this rule, if a registered dealer whose turnover  of all purchases during  a year, is less than  rupees five lakhs opts for the payment  of a lump sum amount of local body tax as specified in the table below he shall furnish  a declaration  in Form R prescribed under  this rule. On a declaration  in form R being furnished by him, the Commissioner shall, on being satisfied  that  the slab from the table specified below, as opted for by the applicant  dealer  is correct, grant  him permission to pay a lump sum  amount  of local body tax in accordance with  the table specified below, for such period and by such date,  as he may specify in his order granting such permission  and the dealer shall pay such lump sum amount of local body tax within fifteen days from the date of receipt by him, of such an order:

Provided that,  if a dealer  to whom permission  for payment  of lump sum amount  of local body tax is granted  under this rule, fails to pay such amount within time stipulated in this rule, the permission granted by the Commissioner for this purpose, shall be deemed to be withdrawn immediately on expiry of such time:

Provided further that,  the Commissioner may treat  the payment  of such amount  to be in accordance with the  permission  granted under  this  rule  earlier,  if such  payment  is made together  with  the interest chargeable  thereon,  under  the  provisions of clause  (a) of sub-rule  (3) of rule 48 within  a further period of three  months from the time stipulated for this  purpose in this rule, or before the end of the year in which such permission was granted, whichever is earlier.

(2)  If, during  the year in which permission is granted  by the Commissioner to a dealer,  to pay a lump sum  amount  of local body tax  under  the  provisions  of sub-rule  (1), or  as  the  case may  be, during  any subsequent year in which such permission is in force, the turnover  of all purchases of such dealer exceeds the limit of such slab, he shall pay such differential amount of local body tax as to equal the amount of local body tax payable by him in such year,in accordance with the slab of the table specified below, applicable to him due to such  turnover  exceeding such limit  or in the  event  of his turnover  of all purchases  during  such year exceeding rupees five lakhs, such differential amount oflocal body tax as is necessary to insure that  the local body tax paid by him is not less than  the amount  that  would be  payable by him otherwise  than under  this rule.

(3) If the  Commissioner  has  reason  to believe that  the  turnover  of purchases of a dealer  to whom permission  to pay lump sum amount  of local body tax has  been granted under  the provisions of this  rule, exceeds the limit of turnover  declared  by him in Form R•submitted for the  purpose  of this rule, and   that such dealer has failed to comply with  the provisions of sub rule (2) of this rule, he may, after  giving such dealer a reasonable opportunity   of being heard, by an order in writing, cancel such permission from the time such turnover  has so exceeded the limit specified in the table below and may proceed to recover from him, the amount of interest chargeable  and penalty  leviable, if any, in addition to the amount  of local body tax payable by such  dealer   otherwise  than  under  this rule, in a manner  prescribed under  the other provisions of these rules. A copy of such order shall be served on the dealer.

Below is the table given in the rule, but also see new notification

Slab NoTurnover of all purchasesLBT Payable
1Up to Rs. 1,00,000/-Nil
21,00,001 to 2,00,0002,000/-
32,00,001 to 3,00,0003,000/-
43,00,001 to 4,00,0004,000/-
54,00,001 to 5,00,0005,000/-