Issues for Builders and Developers

Some of the problems faced by Builders, construction contractors and developers

i.      A lot of problems may arise in case of builders and contractors as provisions and composition scheme are not clear. Detail working has to be made before selecting any method. For example – A builder is constructing a building of seven floor and above, having sanctioned 25000 sq. ft, is liable to pay Rs. 4,65,000/- @ 18.60/- per sq. ft as per R. 27(4). 

It is presumed that 
a. Cost of construction is Rs. 2500/- per sq. ft.
b. 50% material is imported.
c. Average rate of LBT is 4%.
d. So LBT works out at Rs. 12, 50000/- as per regular method.
Hence it seems that lump sum payment method is beneficial. One more benefit is that, once lump sum payment is made, no need to produce details of purchases. 

ii. Similarly, many Corporations make it compulsory to pay this amount at the time of sanction of plan. But it should be kept in mind that adoption of this method is the choice of the builder. 

iii. Once payment is made as per lump sum method, then it is beneficial to purchases goods from outside LBT area as it may cheaper to the extent of LBT. Since most of the builders may out lump sum payment scheme and therefore will try to purchase goods from outside LBT area, the business of suppliers of inside corporation area may suffer. 

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Answers to Question for Study

Had posted some questions on LBT for study as to test knowledge. Here are the answers to those questions.

Answers contributed by +Kishor Lulla  

1. A has imported goods & sold goods to B who is in corporation area. B has taken the delivery of goods (or entry of the goods by B). Who is liable to pay LBT? (S.2 (31A) ).
Ans – A is liable.

2. (a). Whether software downloaded by a dealer inside corporation limit which is purchased from a dealer outside corporation limit is liable to pay LBT? (S.2 (31A)).
Ans – Yes

(b). Whether software downloaded by a dealer outside corporation limit which is purchased from a dealer outside corporation limit is liable to pay LBT? (S.2 (31A) 
Ans – No

(c). In case of above (b) if software is transferred through mail by branch outside corporation area to Head Office within Corporation area ?
Ans – Yes

(d). Whether cable operator/ cinema theatre who downloads programmes / pictures from satellite within corporation area & show them to viewers by charging specific amount, are liable to LBT?
Ans – Yes. But contrary view its quite possible. 

3. A dealer outside corporation area brings taxable goods within corporation area for keeping in cold storage for any duration. Whether the said dealer is liable to pay LBT? Whether cold storage owner is liable to pay LBT? 
Ans – No

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Questions for Study

Test your Knowledge of LBT by answering to these questions. 

1. A has imported goods & sold goods to B who is in corporation area. B has taken the delivery of goods (or entry of the goods by B). Who is liable to pay LBT? (S.2 (31A) ).

2. (a). Whether software downloaded by a dealer inside corporation limit which is purchased from a dealer outside corporation limit is liable to pay LBT? (S.2 (31A)).

(b). Whether software downloaded by a dealer outside corporation limit which is purchased from a dealer outside corporation limit is liable to pay LBT? (S.2 (31a) 

(c). In case of above (b) if software is transferred through mail by branch outside corporation area to Head Office within Corporation area ?

(d). Whether cable operator/ cinema theatre who downloads programmes / pictures from satellite within corporation area & show them to viewers by charging specific amount, are liable to LBT?

3. A dealer outside corporation area brings taxable goods within corporation area for keeping in cold storage for any duration. Whether the said dealer is liable to pay LBT? Whether cold storage owner is liable to pay LBT? 

4. A goldsmith purchases old ornaments from the unregistered person who gives in writing that the said ornaments were previously purchased within corporation area only. Whether goldsmith is liable to pay LBT? 

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LBT Accounting now in Tally

Recently Tally updated it's most popular accounting software - Tally ERP to 4.8 version, This version among other new features incorporated LBT Accounting into the software.
In this post, I shall explain how to enable this new feature in Tally and also what new reports can be generated with this new feature.

First you need to check whether the company selected (with respect to tally) under "Statutory Compliance" has Maharashtra Selected.

This screen appears on pressing "Alt + F3" > "Alter"

Make Sure that "Maharashtra" is selected, otherwise the LBT shall not be activated.

Now on "Gateway of Tally" press "F11"

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No LBT withdrawal in State budget

Maharashtra Government disappointed taxpayers by not withdrawing LBT against which traders across State had been agitating since almost a year and although Chief Minister had assured traders that appropriate remedy would be sought shortly has failed to address this grave situation suppressing State traders from growth, which is hitting extremely hard in existing global economy slow down.

J. P. Sharma, president and Tejinder Singh Renu, Secretary of Vidarbha Taxpayers Association (VTA) in their joint press release on State interim budget 2014-15 said that even after concluding that revenue collection had drastically dropped by shifting from Octroi to Local Body Tax (LBT), govt did not withdrew Local Body Tax.

While, The ongoing stand-off between the state government and traders yesterday took a political twist.

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Blog Viewers crosses 100000

No of page views as on 02/03/2014  20:12

Thank You ,
to all Visitors of LBT Thane to make this blog achive 1,00,000 viewership.

We are proud to announce this news, as in just 10 months we could server such a large number of visitors and taxpayers.

This "Total Pageviews" is calculated by Blogspot.com (a google product) itself. Every Time you visit on this blog, your visit is counted by google bots and added to this number, so I say that my blog is visited more than 100000 (One Lac) times.

Click here to read what some visitors said about this blog in these months.

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Comparing LBT, octroi data unearths huge evasion

The Nagpur Municipal Corporation's (NMC) local body tax (LBT) department has unearthed its biggest-ever evasion case, netting a big pharmaceutical company. The department also caught an iron small scale industry for evading LBT. The two cases were unearthed by comparing data of octroi and LBT.

NMC sources told TOI many big traders evading LBT are set to come under the scanner in the coming days. "LBT department led by assistant commissioner Milind Meshram has consolidated data of octroi and started to compare returns of traders registered under LBT and their payments. The two cases unearthed on Thursday were the result of comparison of octroi and LBT data," sources said.

A senior NMC official told TOI that search and seizure operation was conducted on Nitika Pharmaceutical situated at Wanjara Industrial Area, Kamptee Road, and on Khandelwal Iron Udyog, Great Nag road. LBT squad seized documents from Nitika Pharmaceutical and found that chemicals worth Rs16.52 crore were imported into the plant between April 1, 2013, and January 31, 2014.

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NMC awaiting revision of LBT rates

The Nagpur Municipal Corporation (NMC) has asked the state government to revise the rates of local body tax (LBT) on seven products. However, the revision has been sought citing flaws in the rates schedule only. Though facing a huge revenue deficit, the civic body has not proposed revision in the rates of major products.

Municipal commissioner Shyam Wardhane had sent the proposal before December end and a decision from the state government is awaited. According to LBT bylaws, the civic chief has the powers to propose revision in LBT rates. He is supposed to submit it for approval before January 1 every year. Thus, the LBT rates of all products, excluding the seven products, will remain untouched in the 2014-15 fiscal.

Wardhane had sought revision in the rates of spices, coffee, vehicles accessories, ready-made curtains, fabric clothes, gunny bags and house furnishing cloth.

Chairman of tax consultative committee Girish Deshmukh told TOI the government finalized the LBT rates according to its wish and did not consult the civic body. "NMC had experience of octroi and good knowledge about product sales. Government did not make the rates of some products clear. NMC is studying and suggesting revision in these products," he said.

Giving reasons behind the proposed revision, a senior NMC official said traders were taking undue advantage of the vague LBT rates for some products. "Government finalized 0.5% of LBT on spices. There are two types of spices imported into the city, including whole spices and spices in powder form. The rates for the two types of spices were different in octroi. Therefore, LBT department proposed to fix LBT on spices in powder form at 2% and continue 0.5% on whole spices," he said.

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