Saturday, August 30, 2014

Developments in August 2014

This is the list of what all developments happened around LBT in August 2014. Starting this month, we shall have monthly post of all the news about LBT, Were in one page get all news about Local Body Tax.
 Munucipal Corporations hope that collection growth rate will pick up.
To see what all developments happened in GST in August 2014, click here

Municipal corporations bat for LBT, hope growth rate will pick up

Date : 29th August 2014
When the standing committee of the Pune municipal corporation hiked its annual budget outlay by Rs 541.99 crore for the current financial year, it justified it by saying that the newly introduced local body tax (LBT) would fetch more revenue.
Given the protests surrounding LBT and a Rs 1,000 crore deficit (from the set target) it suffered in the last fiscal, the standing committee's optimism may appear a tad misplaced. But a look at collections reveals that the cash flow to civic bodies is maintained. Municipal corporations that had implemented LBT in 2011 do rue a poor growth rate in total revenue, but the others are optimistic of not missing the targets.
LBT had last year replaced octroi, which accounted for 40% of PMC's revenue. Civic officials said LBT should stay. "In the last few years, budget figures are increasing, but the actual revenue generation is declining. The state government doesn't even bother to provide its share in civic budgets sponsored by the Centre. Abolition of LBT will prove disastrous for PMC," said a senior official.

Source: Times of India

Traders feel LBT is good but tedious

Date : 29th August 2014
The vociferous protests against local body tax (LBT) do not essentially convey the real experience many traders have had in the last one year since it was implemented. The LBT feedback is strangely positive for reducing the many hassles associated with octroi, but at the same time traders grudge the tedious bookkeeping, which is applicable even for mom-and-pop shops.
The demand for abolishing LBT doesn't appear as strong at least in some cities. In Pune, trader associations want LBT to go, but a sizable group of industrialists say they have had a satisfactory experience with the new tax and want it to continue. It is the same story in Nashik where traders have said they support LBT as it doesn't require them to wait for goods and material stuck at octroi posts. Ironically, traders in Aurangabad and Kolhapur, where LBT was first implemented in 2011, are the most against it.
The only common feedback across cities and trader bodies is the need for a single tax as against a variety of taxes thrust on businesses, which requires them to spend time, money and manpower on managing accounts.
Source : Times of India 

Bandh at Kolhapur by anti-toll committee, causes 80Cr losses in city

Date: 27th August 2014
The daylong bandh called by the Kolhapur anti-toll committee (KATC) on Tuesday hampered a daily turnover of Rs 80 crore in the city, believe experts. With business establishments shut down, industries, retail-wholesale trading markets and transport facilities incurred losses as citizens spontaneously responded to the bandh call.The bandh was peaceful.The city streets remained deserted till the evening.
The estimated loss due to the bandh could be Rs 80 crore, experts said. The biggest sufferer was the trading community, which may have lost Rs 60 crore in a day.
There are over 22,000 small and medium shops in the city. All the shops remained closed to protest against the toll and the local body tax (LBT). The city's usual business is of Rs 60 crore a day, which was lost.
The daily turnover of city-based engineering industries is Rs 8 to Rs 10 crore. With workers finding it difficult to reach workshops at Udyam Nagar and Vikram Nagar, these industries lost out.
Source : Times of India

Petrol Pumps on indefinite strike in Maharashtra since 26th August

Date : 26th August 2014
Federation of All Maharashtra Petrol Dealers' Association (FAMPEDA) has called indefinite strike in the state starting 26th August. The association is seeking uniformity on petrol and diesel prices along with reduction in Local Body Tax (LBT) to 0.1%. Around 4,660 petrol pumps located across the state shall remain closed for an indefinite period.
Earlier this month, dealers had organized a day-long protest strike to grab government's attention to the issue. But back then negotiations with the government could not reach a decision. Uday Lodh, president of FAMPEDA has reportedly made several futile attempts to engage in a formal conversation with Deputy Chief Minister, Ajit Pawar and Chief Minister, Prithviraj Chavan on 20th and 21st August. Lodh added, “We are open for discussion, but it seems that the government is playing down the demand and compelling us to go on strike.”
Dealers have been long complaining about loosing sales due to Value Added Tax (VAT), Octroi, Local Body Tax (LBT) and State Specific Charge (SSC). Currently, the state government collects about 21% of VAT on diesel. Lodh said, “We want the government to announce at least 3% cut in VAT on diesel with immediate effect. This will provide a much-needed relief to the dealers.” Currently, the government collects a mere 0.1% LBT on gold ornaments whereas its collects about 2 - 5% in case of petrol and diesel. Lodh added, “It is injustice on the citizens as they spend more on petrol and diesel than gold.”
Federation of All Maharashtra Petrol Dealers' Association (FAMPEDA) said that if this protest works out well, petrol and diesel prices may come down by Rs. 5 to Rs. 6 per liter in the state. This would indeed be beneficial for generating state government’s revenue, end user and the petrol pump dealers in the state.

Source : Car Trade 

Proposed strike of petrol dealers called off

Date : 26th August 2014
The proposed indefinite strike called by petrol dealers in Maharashtra from midnight has been called off after mediation by Vinod Tawade, BJP leader and leader of opposition in the state legislative council, according to a BJP release.
The decision was taken after Tawade assured leaders of Federation of All Maharashtra Petrol Dealers' Association, including its president Uday Lodha, that Shiv Sena-BJP alliance would positively consider scrapping local body tax and reducing VAT if voted to power in the October assembly election, it added.
According to Lodha, Maharashtra government did not hold any talks with the Association to avert the strike. 

Source : India TV 

Protests continue, demands get complicated

Date : 25th August 2014
As it turns out, the two month-long agitation against the implementation of local body tax (LBT) last year wasn't just an initial hiccup to a new tax regime. A year on, protests have built up against the levy, only this time the trader fraternity from different cities seems to have a diverse wish list on the their choice of tax. Adding to the confusion, chief minister Prithviraj Chavan recently said that civic bodies can choose between octroi and LBT.
The LBT issue is far from resolved as no uniform alternative seems to be emerging from the protests.
In Nashik, for instance, trade and industry bodies that were opposed to Local Body Tax (LBT) for the past one-and-a-half years, have now decided to go ahead with it instead of octroi. In Pune, traders want neither LBT nor octroi, and say the state should simply share its Value Added Tax (VAT) revenue with the civic body. In Aurangabad too, trader bodies are opposed to both LBT and octroi and have asked the Centre to levy goods and services tax to ensure a uniform tax structure across the country, cutting competition between states. However, their demand to the state is a tad tweaked ? a uniform tax structure for cities, to ensure there is no difference in rates in the outskirts and core city areas. Traders in Kolhapur are batting for the Subodh Kumar Committee report's recommendations on increasing VAT surcharge on goods.

Source : Times of India

Pune unit objects to local body tax rate revision

Date : 25th August 2014
The city unit of Congress party has objected to the revision of Local Body Tax (LBT) rates. The party unit has written a letter to state government as well as the civic administration in this regard.
The civic administration's income from the LBT is expected to fall after the escort charges levied on vehicles were cancelled. The administration, which expects to lose around Rs 45 crore, has now planned to modify the local body tax of a few commodities to overcome the losses.  

Source : Times of India

Escort charges scrapped by Pune Municipal Corporation, LBT takes Rs 45-crore dent

Date : 25th August
The civic administration's income from the Local Body Tax (LBT) is expected to fall after the escort charges levied on vehicles have been cancelled. The administration, which expects to lose around Rs 45 crore, has now planned to modify the local body tax of a few commodities to overcome the losses.
Escort charges are taken for goods that are not to be consumed or sold, but the vehicles carrying them pass through the municipal limits. The civic bodies charge Rs 100 per vehicle as escort charges. The state government scrapped these charges levied by 26 municipal corporations from August 15.

Source : Times of India

Aurangabad Municipal Corporation hikes local body tax to mop up Rs 15cr

Date : 22 August 2014
The Aurangabad Municipal Corporation (AMC) has hiked local body tax (LBT) with effect from August 16 to compensate its losses caused due to abolishing transit tax by the state government. The civic body is now expecting additional LBT of more than Rs 15 crore per annum.
However, the move has not gone down well with the trading community. The community has reluctantly accepted the LBT till the goods and services tax (GST) comes into effect.
Source : Times of India

3-member team to advice civic body on Local Body Tax returns in Thane

Date : 20 August 2014
The Thane Municipal Corporation has proposed to spend Rs 2 crore for a three-member committee to advice the corporation on the annual Local Body Tax (LBT) returns filed by the city traders. However, the committee will be formed only if the proposal gets a clearance from the general body.
The advice to appoint committee of experts is a brain child of the TMC's legal. The proposal for appointment of experts committee will be tabled before the TMC's general body meeting. "LBT was introduced recently (around a year ago) and this is the first year of the new tax regime. Hence, the TMC staff is not expert enough to handle the subject like scrutiny of the returns, handle appeal if any. Hence the corporation is mulling to appoint experts who can guide the TMC on the LBT tax and returns issue," a civic official said. He added, "The idea is at very nascent stage. Only if the general body approves the procedure to appoint experts, a committee will take off or else the corporation will have to find a solution to resolve the issue."
Source : Times of India

Civic body invites CAs to monitor LBT returns

The civic body has decided to appoint a panel of chartered accountants (CA) for detail audit, scrutiny and assessment of annual returns filed by dealers under the local body tax (LBT). An Expression of Interest (EoI) has been invited from CA firms by the civic body.
Source : Times of India

Aurangabad Civic body may bring back octroi in city soon

Date : 15th August 2014
The Aurangabad Municipal Corporation (AMC) may go for octroi after the state cabinet's decision to allow all municipal corporations to choose between octroi and local body tax (LBT)). Though, the authorities held a meeting on the issue on Thursday evening, they couldn't reach a conclusion, said civic body sources.
The sources, however, said that the officials and corporators may throw their weight behind reintroduction of octori in the city limits.
Source : Times of India 

Civic bodies can choose between LBT and Octroi: Prithviraj Chavan

Date : 13 August 2014
In a u-turn from his staunch support to implementation of the Local Body Tax (LBT), Maharashtra Chief Minister Prithviraj Chavan on Friday said the civic bodies will now have the option to choose between LBT and Octroi.
Talking to reporters here Chavan said since Municipal Corporation of Greater Mumbai (MCGM), commonly known as BMC, has decided not to switch from octroi to LBT and with steep opposition from traders against LBT, government has decided to allow civic bodies to decide for themselves.
"BMC gets Rs 6,000 to Rs 7,000 crore income from octroi and it is not interested in switching over to LBT. We cannot give selective choice to one civic body only and the same should be applicable for others as well. Those interested in scrapping LBT and continuing with Octroi should pass a resolution in the general body meeting and forward the proposal to the state government for approval," Chavan said after the weekly cabinet meeting.
Source : First Post