Saturday, July 25, 2015

No abolition of LBT, traders with turnover of less than Rs 50 cr get exemption

Despite giving assurance of complete abolition of local body tax (LBT) in the municipal corporation area from August 1, the state government has issued a notification that has only waived off LBT for traders with an annual turnover of less than Rs 50 crore.

The tax will continue to be levied for traders with business of more than Rs 50 crore.

In a notification dated July 23, the state government said that the traders with more than Rs 50 crore of annual turnover needed to register themselves with the civic body while those with a turnover of less than Rs 50 crore should apply to civic body for removing their names from the list of taxpayers. (Notification below)

In Pune municipal corporation of the 70,000 traders registered with the PMC for LBT, only 121 traders had a turnover of over Rs 50 crore. While for Nagpur the number stand at 21. There is no clarity on the compensation to the civic body on revenue loss as the LBT is not completely abolished. Maharashtra is groaning under Rs3.04 crore loans and borrowings and the debt servicing burden amounts to an annual Rs24,000 crore. LBT only for larger players could lead to uneven pricing.

"Why should (these large industrial houses) be exempted from LBT and given concessions?" State finance minister Sudhir Mungantiwar questioned, adding that around 250 industries accounted for around Rs1,100 crore LBT revenue to municipal corporations.

A silver lining is that this the new system will be in place for a few months only as the Centre is looking to introduce the Goods and Services Tax (GST) from April 1, 2016. The GST aims at creating a single, unified tax for goods and services across India, replacing other levies — central excise, VAT, octroi and entry tax.

Notification will be scanned and attached to this post by 6PM 25/07/2015

Source : Indian Express, DNA, TOI, TOI,