Saturday, March 1, 2014

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.

The official added that the same is the case with coffee. "There is no specific mention of products related to coffee. Government simply finalized 2% on coffee. NMC sought 2% on coffee beans and 4% on coffee powder in branded packets. Government itself finalized 4% on tea powder packed in packets," he said.

"Government had not mentioned LBT rates for accessories related to vehicles. There is a specific mention about LBT rates on vehicles and its spare parts. But no mention of various types of accessories. Therefore, the department proposed to fix 4% on accessories. LBT rate on spare parts is 2%," the official said.

The official said NMC was incurring loss in case of gunny bags. "Government finalized LBT rates according to per bag. NMC used to charge 1% on old gunny bags and 2% on new ones, and the department has sought the same rates," he said.

The cloth traders are reportedly taking undue advantage of rates on ready-made curtains. "Government did not mention LBT rates on curtains. LBT rate fixed for clothes is 1.5%. Accordingly, traders are paying LBT cess on curtains. But government had fixed different rates for cloth and curtains in octroi, as they are different products. Therefore, the department has requested the government to fix LBT rates on curtains at 4%," he said.

Similarly, the LBT department had asked the government to fix rate on fabric in rolls at 5% and 1.5% on house furnishing cloth.

Source : TOI