Friday, January 31, 2014

LBT Collection beats octroi in Pune

After several hiccups in its initial months, it looks like the Local Body Tax (LBT) levied by the Pune Municipal Corporation (PMC) has come into its own. Revenue generated by the LBT till December has overtaken the amount the civic body collected from octroi during the same time last year.
PMC has collected Rs 862 crore from traders via LBT, while the octroi collection last year was Rs 864 crore. However, the octroi revenue included collections from the Pune and Khadki Cantonment areas, while LBT excludes these.

Despite strong protests from traders, LBT collections increased drastically over the past two months after PMC initiated raids on those who refused to pay the tax, introduced in April 2013. LBT collections were low from April to September, well below what was collected via octroi during the same time in 2012.

However, following a green signal from the State government, PMC started raids on trade establishments which hadn’t paid LBT. In October and November, PMC collected Rs 155 crore and Rs 114 crore from LBT respectively. The octroi collection for these same months in 2012 was Rs 119 crore and Rs 100 crore respectively.

During the raids, civic officials found traders had not paid LBT on the purchase of items worth Rs 37 crore. Against these, PMC collected Rs 6.18 crore through these raids, following which 2,250 new traders registered under LBT. Of these, 1,500 traders paid LBT immediately. The number of traders who have registered has gone up to 71,716 till date.

Vilas Kanade, joint commissioner of LBT said, “The LBT collection has reached Rs 862 till November. We expect around Rs 120 crore within the next 15 days (December’s collection will be calculated by January 20).”

Kanade added, “Apart from raids, sending regular reminders and hearings helped. We conducted more than 1,000 shearing and sent almost 2,000 notices to traders.  Besides that, we have carried out 40 raids within 40 days from November 20 which are still going on.”

Popatlal Ostwal, president, Pune Traders Association, said, “PMC created a picture of loss after the trader’s community resisted LBT. However, people are cautious with any new law.”

“Now, traders understand the system and are paying LBT regularly. It’s not just the raids that helped to boost collections. Our full cooperation played a big role. It will also increase in March when traders file returns on their total yearly transactions. PMC has no revenue worries,” he added.

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