LBT Postponed in Mumbai

In a major relief to the trader community in the city, chief minister Prithviraj Chavan on Monday reiterated that the government will not introduce the Local Body Tax (LBT) in Mumbai from October 1.

Earlier, the government had set October 1 as the deadline to implement the new tax system in the city.

Leader of the opposition in the state legislative council Vinod Tawde, along with other legislators, had a meeting with Chavan over LBT in Vidhan Bhavan on Monday.

"The CM has assured legislators that the ruling DF government has no intention of bringing an ordinance to introduce LBT in Mumbai. He even assured the delegation that any decision on the new tax system will be taken only after a thorough discussion on the subject in both Houses of the state legislature," Tawde told the media after the meeting.

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Updated Links

I received request to have listed all the municipal corporations website's LBT (Local Body Tax) page. So accordingly the websites list has been complied
 and available on "All About LBT" Page.

Click here for Municipal Corporation LBT Dept Page

Also the Challans section of "Download" Page has been updated. Some of the corporation have made it mandatory to use serial numbered challans, hence the challan has to be purchased form the respective corporation. those corporation who have made challans as a format to be used by anyone has been added to the list of challans.

Click Here for Challan Download

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Calculating the limit of turnover

Rule 4 – Calculating the limit of turnover for liability for registration. 

1.     For the purpose of calculating the limits of turnover for liability for registration,-

(a)  except  as otherwise  expressly  provided,  the  turnover  of all  sales or, as the  case  may  be, the turnover  of all purchases,  shall be taken into account whether such sales or purchases are of goods taxable under  the provisions of the Act and the rules or not ;

(b) the turnover shall include all sales and all purchases made by a dealer on his own account, and also on behalf of the principals mentioned in his accounts.

(c)  in the case of an auctioneer, in addition to the turnover, if any, referred to in clauses (a) and (b), the turnover shall also include the price of the goods auctioned by him for his principal, whether the offer of the intending purchaser is accepted by him or by the principal or a nominee of the principal if the price of such goods is received by him on behalf of the principal.

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The limits of turnover for registration

Rule 3 – The limits of turnover for registration.

1  1.  The limits for  registration shall be,-

(a)  in the case of a dealer,  who is an importer and the value of all the goods imported by him during the year is not less than Rs. 1,00,000.

(b) in any other case, including the case where a dealer has not become liable to pay local body tax under clause (a), and the turnover of all  his sales and purchases during such year, is not less than Rs. 5,00,000.

2.     Notwithstanding anything contained  in sub-rule  (1), if a dealer  or a person not carrying  on a particular  business  in   the  City on a regular  basis,  carries  on business  in the  City in any year  on a temporary  basis, then  he shall be liable for temporary  registration  under  the provisions of the Act and these rules,   whether  or not he is liable under  sub-rule (1) of this rule

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Starting LBT Flash Tutorials

From today we are starting "LBT Flash Tutorials"

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Registration (Vedio)

Do you some times feel that it would be nice to have animation to make you understand the boring Rules and Regulations? So, here is your wish come true.

Watch this video on LBT Registration and get to know new provisions of Registration in Local Body Tax as updated by LBT Rules 2013.

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LBT Bare Rules - 2013

Launching a new book on Local Body Tax by Adi Publication - LBT Bare Rules 2013 (3rd Edition). This is first book to incorporate amendments made by LBT notification dated 20th June, 2013. 

This E-Book shall be very useful to LBT Consultants, Lawyers, Chartered Accountants. This new book on Local Body Tax an indispensable reference material for all those who are looking for a easy to understand LBT bare Rules with all amendments (up to 1st July 2013).

The amendments made in LBT Rules 2010 by LBT notifications 2012 and 2013 are highlighted and all the Rules are arranged, formatted and indented for ease of reading and understanding.

The Highlights of the book are -

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LBT Bare Rules 2012

Launching Today Local Body Tax Bare Rules 2012.

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LBT Bare Rules 2010

Today launching a new book on Local Body Tax - "LBT Bare Rules". Enough of the bad formatted, difficult to read Rules which are available at the corporations website. This new book shall be updated from time to time and to enable the users of this book to remain ahead of the competition.

 This new book contains LBT Rules 2010 in nicely formatted presentations with beautiful fonts and logical indentation for Sub-Rules and Sun- Clauses.

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LBT Bare Rules (Coming Soon)

The Local Body Tax Rules which are available on the net at various municipal corporation websites are outdated, even if you find the LBT Rules 2012 or 2013 these contains only the LBT amendments and thus making reading and understanding these already complicated rules even more difficult. But now no more.

"Local Body Tax Bare Rules" E-book is coming soon. This shall be free for those who have already purchased the Main Book - Local Body Tax (All that you need to know about LBT). This new book shall be launched very soon and shall be coming updated with new notification of LBT Rules 2013.

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No checks, transit inspection at entry points

No checks, transit inspection at entry points for traders under LBT This Will Help Bring In Transparency In The Tax Net

In accordance with the state government's amended notification, transit inspection, obstruction of vehicles, checking of goods, detaining the occupants on road have become a thing of past. The concerned  urban development department (UDD) of the state government held back the power to sanction such orders to the top officials from municipal corporations on request.

The state government has amended the law recently, removing the earlier clause (26) of transit inspection at erstwhile octroi collection plazas under the new levy of Local Body Tax (LBT). Earlier, the law had a provision empowering

the municipal commissioner and his subordinate at the rank of deputy civic commissioner to stop vehicles for further check on transit system mainly at check posts which triggered resentment among the traders and residents. Bowing to constant pressure from the trading community, the state government enforced necessary changes for free access of motorists and residents at check posts. 

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Accounting Entries for LBT

I received some questions for what will be the accounting entries for recording LBT transactions in Tally or other accounting software.

There can be two ways to account for (depending upon how much time and human resources you have for accounting. 

1st Way - (Easy)

Take total of all purchases (including VAT, Excise), deduct the purchases on which LBT is not applicable. This shall give you the amount of taxable purchases. Apply the LBT rate applicable for your purchases and pass the following entry at end of every month (This entry thus shall be passed on 31st of March at the year end)

Local Body Taxes a/c      Dr
      To LBT Payable a/c

At the time of making payment of this amount next month (i.e on 20th of next month, pass the below entry.

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Suggestions for LBT Changes

The following are the Suggestions for changes in LBT Law

1. The implementation of LBT should be given to VAT authorities. All the provisions of MVAT should be made applicable to LBT. By this, assessment by two authorities will be avoided.
2. For proper implementation of LBT, there should be a district level committee of trading Organizations, Tax Associations and consumer bodies under the chairmanship of Commissioner who should discuss to solve the common problems of traders, once in a month.
3. The Rules are not properly worded. There is wide scope for discretion and interpretation.  Rates of LBT should be same in all Corporations. A State level committee should be formed to study the anomalies in the LBT Rules.
4. One full day workshop of officers & traders to be arranged by the Commissioner for smooth implementation of LBT. Majority of the litigation have started due to lack of knowledge and misinterpretation.
5. Details of Act, Rule, Schedule A (taxable goods), Schedule B (Tax free goods), Circulars, Internal Guidelines & decisions in appeal to be displayed on website. (Sec.152Q)

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Changes in LBT Rules 2013

As posted earlier - LBT Rules 2013 Passed.

The following are the important changes in LBT Rules 2010 made by LBT Rules 2013. The changes in registration limits, refund procedure shall now be posted fresh after the changes made, so stay tuned to the website.

1. Registration limits increased, earlier imported importing goods more than 5000 was liable for registration, now limit increased to 1,00,000.
2. Dealers can now maintain Form D register electronically. i.e. if accounting records can generate the data required in form D, then no need to maintain any additional records. Thus now people using Tally or other such accounting software need to make changes in their softwares so that the data required in form D can be maintained in these softwares itself.
3. Rule 26, which curtailed power of inspection by giving power of inspection  only to commissioner and Deputy commissioner now has been deleted.
4. The definition of process for job work has been widened, now any process which is notified by commissioner of that corporation shall also be considered as Job Work.
5. The due date for filling E2 return is now 90 days from end of the year. Earlier only 15 days time was given.

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LBT Rules 2013 Passed

The LBT Rules 2013 which were in the draft form since april 25th, 2013 have been finally passed. The Rules have many changes from the draft which was prepared before. Full details about rules shall be soon posted on this website.

LBT Rules 2013

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