Friday, December 13, 2013

Godown Queries

This post shall discuss and attempt to solve all the queries relating to LBT (Local Body Tax) in case a person has a Godown in a Non LBT area but purchase bill contains address of main office, which is in LBT area.

When I say "LBT area" I mean within city limits where LBT is applicable.

  • Q - Whether LBT is payable if Address of bill is of Main Office, but goods delivered to Godown?
  • A - No, LBT is not payable. LBT is payable only if goods physically enters the city (except Rule 20, which is not applicable in current discussion). But a dealer will have to prove that goods has not entered city.

  • Q - LBT payable? if Godown address is not mentioned in Invoice?
  • A - Yes, as there is no proof of goods being delivered at godown

  • Q - So, what proof has to be kept for proving goods have been received at Godown and not at Main Office
  • A - Invoice should contain address of Godown, Attach delivery challan to Invoice, Keep copy of lorry receipt.

  • Q - Goods which I bring in Godown are later on sent (whether sold or not) to LBT area, will I be liable to pay? As LBT is payable only on Purchases.
  • A - It is true that LBT is payable on Purchases, but this is not a thumb Rule. A person importing goods have to pay LBT and hence even LBT can be payable on Sales. If goods later on sent to LBT area, then LBT now will have to be paid.

  • Q - If I have already paid LBT at the time of goods received in Godown, whether again LBT will be payable?
  • A - You don't need to pay LBT once again, if you have paid LBT in respect of the same goods in same corporation.

  • Q - I take hand delivery of goods, and also don't have any of the proof to prove goods have been delivered at Godown
  • A - At the time of Octroi, the onus of proving was on department, but now at the time of Scrutiny (i.e. Audit), you will have to prove that the goods have not entered city and hence LBT is not payable on them. I would suggest that you make arrangements for proof. At last if proving documents are not available then make payment of LBT.