Nagpur: Both the NMC and local traders are at loggerheads over recovery of newly introduced Local Body Tax. The ongoing tiff has snowballed into new controversy as the traders are now pressing to push away LBT post the establishment of new state government powered by BJP. The Chief Minister Devendra Fadnavis told that LBT will remain till new tax come into existence. Since then the trade circles are banking on the notion that GST (Goods and Service Tax) may replace LBT. However the GST format clearly prescribes that it cannot be used as a substitute for any local body taxes, and LBT clearly is one. This has left the traders in another round of tizzy.
In an exclusive talk with Nagpur Today, Chairman of Confederation of Traders in India BC Bhartia said that the promises of a person made before the marriage and its fulfillment after marriage has a lot of differences. To comment on a particular thing when you are not in power doesn’t hold value but it does matter when you are in the centre of power. Possibly while making statements the words used before elections were based on the feedbacks given by general public. But after coming to power, they have confronted with reality, though their intentions are very good, but any decision to disturb the revenue has to be considered after considering all the pros and cons.
According to the Amendment 74 of the Indian Constitution, all local bodies including Municipal Corporations should be independent to have their own revenue generation mechanisms. They should not depend on the State or the Central Government for funds for local development projects. Independent also means controlling, collection and administration independently by the local bodies.
When the Octroi was removed from other states, they removed the Octroi from the entire state at one stroke and implemented the Entry Tax, so no hue and cry was observed. However, in Maharashtra, when they removed Octroi in 2005, they removed Octroi except in Municipal Corporation limits. They had to make up for the loss of revenue through some adjustments.
‘Corporate comapanies seek ways to evade LBT’
B C Bhartia also told that some of the major LBT payers are Petrol and Diesel importers and distributors, Liquor and Tobacco Dealers and dealers of Fast Moving Consumable Goods (FMCG).According to him, it is not the small companies and traders who are the defaulters, but very big corporate companies who device ways to evade taxes and LBT.
One very important thing that has to be considered is that when NMC sends notice to a trader, they demand the following:
- Brief note on Business
- ‘D’ Register maintained under rule 19 of LBT
- Copy of Registration Certificate under MVAT Act 2002
- Returns filed under MVAT Act 2002
- Sales and Purchase Registers
- Summary Statements of Sales and Purchases (Month wise)
- Trading Account, Profit and Loss Account and Balance Sheet for the year required.
- Bank Statements
- Purchase invoices
10. Sales invoices.
The traders are also asked to note that if they do not comply with the requirements of the notice, they shall be rendered liable for penalty under sub-clause (b), clause 2 of Rule 48 of LBT Rules which is Rupees 5000 as specified under clause (c) (ii), clause 3 of Rule 48 of LBT Rules.
B C Bhartia wanted to know, how many employees are well versed with the accounting rules and regulations. Are they trained to interpret complicated financial transactions which usually are dealt with by professionals like Chartered Accountants.
