Sunday, July 20, 2014

LBT on Electricity?

The standing committee members on Saturday (20th July 2014)  took a tough stand by asking the Aurangabad Municipal Corporation (AMC) to bring supply of electricity under the ambit of Local Body Tax (LBT). Terming supply of electricity as a commercial activity, the members said the power franchisee for the city "GTL Urja" should pay the tax.

In September 2013, the state government had exempted about 58 commodities, including electricity, from the LBT. The members said the AMC should renegotiate the issue with the state government highlighting the significance of the tax for cash-strapped municipal bodies. The members also said it was not a state-owned agency that is supplying electricity to the city. "It is a private company engaged in the activity with commercial interests and hence, it should not be spared from the tax," they said.

Corporator Trimbak Tupe said the power franchisee is buying electricity from the Maharashtra State Electricity Distribution Company Limited (MSEDCL) and selling it to consumers within the municipal limits. "The company is engaged in the commercial activity and should pay LBT regularly. The civic body must initiate talks with the state government and create an atmosphere for imposing the tax on electricity. It would generate huge revenue for the municipal body," he said.

Corporator Kashinath Kokate sought clarification from the civic body on whether the administration had opposed the state government's move of exempting electricity from the LBT. LBT officer Ayub Khan said municipal commissioner Harshdeep Kamble had raised the issue with the government highlighting the monetary loss to the local body.

Standing committee chairman Vijay Waghchaoure directed the municipal administration to provide details of the communication between the civic body and the state government on the issue and assured the members to take it forward in the next meeting.

The Aurangabad bench of the Bombay high court recently directed GTL Urja to pay Rs 21.12 crore to the civic body on account of outstanding LBT. Khan said the franchisee had already paid Rs 1.25 crore and the civic body would recover the remaining amount as per the directions of the high court.

Source : TOI