This Article is written by +Kishor Lulla
Some Acts, like Works Contract Act, have been born in negative atmosphere. Local Body Tax is also one of them. These Acts never gave satisfaction to anybody, either it may be Revenue, Dealers or Courts of Law. Though not sure, but at least as on today, trading community is happy on the news that L.B.T. will be repealed from 01/08/2015. Of Course, as usual, alternative is un assured. Let us wait for the good to happen.
There are some provisions in the Maharashtra Municipal Provincial Rules of which proper care should be taken before repealing the Act.
1)Rule 28 (iii) –
If any goods held by a dealer or a person in the city are moved outside the city for carrying out the processes enumerated in the Explanation to this rule, and are re-imported without effecting any change in condition or appearance, as also the ownership of the goods, the value of the goods moved out, shall be allowed to be deducted from the total value of processed goods reimported and LBT shall be leviable only on the value added i.e. processing charges, transfer charges, etc. provided that, the goods are reimported within a period of six months from the date of export outside the city and the dealer furnishes the information of such export in the returns for the relevant period
2)Rule 28 (iv) –
If any dealer in the city imports any goods from any place outside the city for carrying out any of the processes enumerated in the explanation under this rule, on job work basis and proves to the satisfaction on the Commissioner that the goods processed have been exported within a period of six months from their importation, to the same person outside the city and there had been no change in the ownership and in the form of the goods at the time of export, no LBT shall be levied.
3)Rule 28 (v) –
When any goods held in the city are sold and exported outside the city are received back due to rejection of goods by the purchaser, no LBT shall be levied on such goods, provided that the goods are received back in the city within a period of six months from the date of their export and the dealer proves to the satisfaction to the Commissioner that the sale of such goods was disclosed in the return of the relevant period.
4)Rule 32 (i) –
Where any goods which are imported in the city on which LBT has been paid, are exported outside the city by the same person by way of sale or otherwise, then ninety percent of such amount of LBT so paid, shall be refunded to that person on satisfaction of following conditions –
a)The details of goods imported are given in the relevant return, showing that goods are imported for export, and the return is furnished.
b)LBT on such import is paid with relevant return.
c)Goods are exported within period of six months from the date of importation.
w.e.f 20 June 2013 –
Provided further that any dealer who is importing and exporting the goods in the same calendar months and provide sufficient proofs for that, the Commissioner may allow him to set-off in the next calendar month.
As per above mentioned rules, a registered dealer has right to claim setoff, even if he exports the goods any time within six months from the date of purchase. Hence provision of filing returns has to be kept alive for six months next from the date of proposed repeal of Act. Again after completion of six months also some time limit has to be given to file the return.
5)As far as appeals are concerned, unfortunately, there is no Appellate Tribunal under L.B.T. If the assessment order is passed by Commissioner of Corporation, then appeal can lie only in High court. In most of the districts, assessments are not completed as on today. Hence necessary facility of first/second appeal may be provided before going to High Court, if this tax is merged under the MVAT ACT.
6)Majority of the dealers have not paid L.B.T. or paid it very late due to confusion & agitation. Hence an amnesty scheme for waiver of interest & penalty may be declared immediately from 1st June 2015.
7)The provision of taxation or exemption for job workers ( R. 28) is very much unclear. A detail circular clarifying & method of payment of tax/exemption on all types of job works may be issued forthwith.
8)In case of builders & contractors if lump sum L.B.T. is paid as per R. 27(4), on sq mtr basis on entire building, then he should get proportionate exemption or set off or refund from the date of proposed abolition of LBT. Same applies to the composition dealer.
9)All above mentioned are few instances which are going to create conflicts even after proposed repeal of Act. Proper care by competent authority has to be taken very urgently to avoid heavy appeals & again agitation for proposed heavy dues after assessments are done, in future.
Some Acts, like Works Contract Act, have been born in negative atmosphere. Local Body Tax is also one of them. These Acts never gave satisfaction to anybody, either it may be Revenue, Dealers or Courts of Law. Though not sure, but at least as on today, trading community is happy on the news that L.B.T. will be repealed from 01/08/2015. Of Course, as usual, alternative is un assured. Let us wait for the good to happen.
There are some provisions in the Maharashtra Municipal Provincial Rules of which proper care should be taken before repealing the Act.
1)Rule 28 (iii) –
If any goods held by a dealer or a person in the city are moved outside the city for carrying out the processes enumerated in the Explanation to this rule, and are re-imported without effecting any change in condition or appearance, as also the ownership of the goods, the value of the goods moved out, shall be allowed to be deducted from the total value of processed goods reimported and LBT shall be leviable only on the value added i.e. processing charges, transfer charges, etc. provided that, the goods are reimported within a period of six months from the date of export outside the city and the dealer furnishes the information of such export in the returns for the relevant period
2)Rule 28 (iv) –
If any dealer in the city imports any goods from any place outside the city for carrying out any of the processes enumerated in the explanation under this rule, on job work basis and proves to the satisfaction on the Commissioner that the goods processed have been exported within a period of six months from their importation, to the same person outside the city and there had been no change in the ownership and in the form of the goods at the time of export, no LBT shall be levied.
3)Rule 28 (v) –
When any goods held in the city are sold and exported outside the city are received back due to rejection of goods by the purchaser, no LBT shall be levied on such goods, provided that the goods are received back in the city within a period of six months from the date of their export and the dealer proves to the satisfaction to the Commissioner that the sale of such goods was disclosed in the return of the relevant period.
4)Rule 32 (i) –
Where any goods which are imported in the city on which LBT has been paid, are exported outside the city by the same person by way of sale or otherwise, then ninety percent of such amount of LBT so paid, shall be refunded to that person on satisfaction of following conditions –
a)The details of goods imported are given in the relevant return, showing that goods are imported for export, and the return is furnished.
b)LBT on such import is paid with relevant return.
c)Goods are exported within period of six months from the date of importation.
w.e.f 20 June 2013 –
Provided further that any dealer who is importing and exporting the goods in the same calendar months and provide sufficient proofs for that, the Commissioner may allow him to set-off in the next calendar month.
As per above mentioned rules, a registered dealer has right to claim setoff, even if he exports the goods any time within six months from the date of purchase. Hence provision of filing returns has to be kept alive for six months next from the date of proposed repeal of Act. Again after completion of six months also some time limit has to be given to file the return.
5)As far as appeals are concerned, unfortunately, there is no Appellate Tribunal under L.B.T. If the assessment order is passed by Commissioner of Corporation, then appeal can lie only in High court. In most of the districts, assessments are not completed as on today. Hence necessary facility of first/second appeal may be provided before going to High Court, if this tax is merged under the MVAT ACT.
6)Majority of the dealers have not paid L.B.T. or paid it very late due to confusion & agitation. Hence an amnesty scheme for waiver of interest & penalty may be declared immediately from 1st June 2015.
7)The provision of taxation or exemption for job workers ( R. 28) is very much unclear. A detail circular clarifying & method of payment of tax/exemption on all types of job works may be issued forthwith.
8)In case of builders & contractors if lump sum L.B.T. is paid as per R. 27(4), on sq mtr basis on entire building, then he should get proportionate exemption or set off or refund from the date of proposed abolition of LBT. Same applies to the composition dealer.
9)All above mentioned are few instances which are going to create conflicts even after proposed repeal of Act. Proper care by competent authority has to be taken very urgently to avoid heavy appeals & again agitation for proposed heavy dues after assessments are done, in future.
