Published On : Wed, Mar 18th, 2015

LBT scrapped, but consumers may pay for the losses

Mumbai/NAGPUR: Traders in Maharashtra will not have to pay local body tax (LBT) after August 1, but to make up for the losses, consumers may have to pay more value added taxes.

Chief minister Devendra Fadnavis said by scrapping the LBT, the government had fulfilled a poll promise. “We were bound to abolish LBT and even declared the date would be after August 1 this year. We will hike VAT,” the CM said.

The LBT will be abolished in 25 civic bodies, costing them Rs6,875 crore.

“Government has failed to honour their commitment of abolition of LBT from 1st April 2015 but in this budget gave conformation for abolition of LBT and Octroi from 1st August 2015 and compensation of revenue by enhancing tax rate of VAT is welcome subject to the state government honouring their commitment made through the budget this time.” said Dipen Agarwal, Past president, NVCC, who spearheaded the agitation against LBT in 2014.

However, consumer activists said the government’s move follows pressure from traders’ lobbies. “Traders were not ready to maintain records. So they increased the pressure on the government and succeeded. Now, consumers will have to pay the price,” said Shirish Deshpande, chairman, Mumbai Grahak Panchayat.

The state’s move also came under the Opposition’s fire. “Any move to increase VAT will hurt people in the villages, as they will be forced to pay for those staying in the cities,” said Opposition leader Radhakrishna Vikhe Patil.