Saturday, July 19, 2014

Kolhapur (KMC) started the procedure of sealing the bank accounts

A harsh spet by KMC. The Kolhapur Municipal Corporation (KMC) started the procedure of sealing the bank accounts of 581 traders from Saturday, with a significant number of traders who still remain out of the local body tax (LBT) ambit taking a toll on the civic body's coffers.

Only 16,500 traders out of the 21,000 that were handed out trading licences by the KMC have been brought under the net of Local Body Tax (LBT). The KMC had recently issued notices to 906 traders for their failure to submit trading details and evading tax. Of these, only 325 traders later paid the tax that helped KMC rake in Rs 2.39 crore in four days since July 16. As on July 18, for the current financial year, the KMC has raked in Rs 22 crore from the tax, against a target of Rs 83 crore.

LBT is considered a major source of revenue for the civic body, along with the property tax and town planning fees. The revenue generated from 2011 ? when the system was introduced abolishing octroi ? is quite low, compared to that of revenue from octroi.

According to civic officials, if all traders are brought under the tax ambit at once, it would increase the revenue steeply and may cross revenue generated from that of octroi. The revenue from LBT in the municipal corporations such as Aurangabad and Pune has matched that of octroi, with more traders brought under the LBT ambit.

"The increasing number of traders paying the tax is an effective measure to increase revenue. We are gathering the details of traders from the licence and sales tax departments to make them pay up the tax. LBT was opposed by traders since it was introduced and therefore many of them have been left out of the tax structure," said Ram Katkar, LBT officer of KMC.

While presenting the budget for 2014-15 in February this year, municipal commissioner Vijayalakshmi Bidari had said, "Though we are not increasing the tax rates for the next fiscal, we are going to implement measures that will increase the efficiency of tax collection. Also, we are going to increase the items for which taxes can be levied."

The state had introduced LBT to increase transparency in tax collection and restrict traders from evading the tax. The reason for which LBT was introduced was to ease traffic congestion at the octroi check points and increase movement of goods in and out of the city.

"The pre-requisite for efficient implementation for LBT is having skilled staff and computerized data collection. The KMC does not have either due to lack of funds. Though the opposition from the traders is one of the reasons for the dip in LBT collection, the civic administration has failed to convince the traders to adopt the system with ease," said an official from the LBT department.

Source : TOI