Published On : Thu, May 15th, 2014

NMC bungle in LBT notice leaves traders/firms red-faced, triggers protests over double trouble


LBT (2)Nagpur News: The traders in Nagpur, it appears, are being put in more and more dilemma and drudgery as well on the LBT front. On one hand, the traders are up in arms and vociferously protesting enforcement of LBT (Local Body Tax) and on the other hand, Nagpur Municipal Corporation is leaving no chance to harass the traders by issuing whimsical notices for paying the monstrous cess.

The ambit of LBT says that all traders/businessmen under VAT regime mandatorily register themselves under LBT.

The controversial and contentious LBT is in force in Nagpur from 01.04.2013 and the first financial year (2013-14) has been completed. Now, the LBT Department has published advertisements in local newspapers in April and May for filing of annual returns and subsequently the traders have been informed to submit their annual returns for 2013-14 by 30.06.2014. Furthermore, the LBT Department has issued notices, dated 18.03.2013 and signed by Assistant Commissioner, to registered traders/firms to furnish following details within 10 days. But the notice is full of anomalies and oddities. The traders have to submit:


1) Balance Sheet — FY12-13 [When LBT was not in force].

2) Bank statement — 01-4-13 to 18-3-14 [Very odd date].

3) Sale bill copy — 01-4-13 to 18-3-14 [Very odd date].

4. Purchase bill copy — 01-4-13 to 18-3-14 [Very odd date].

5. Stock register — 01-4-13 to 18-3-14 [Very odd date].

However, according to department, this odd date is due to issuing date of letter. But when the annual return is already been asked then why all these documents have to be submitted again? Moreover, the above information is asked in annual return also, said the exasperated traders and questioned the prudency. Why the Balance Sheet of 12-13 is asked when LBT was not even in force by that period? This is nothing but a well-planned harassment of traders by LBT Department.

When contacted, LBT Department said the misunderstanding is due to the date of issue of notice which is 18-3-2014.

However, the clarification of LBT Department did not go well with the traders. “We highly protest this type of double trouble by the LBT Department. They should stick to one process. All are not free to do only huge paper work twice. Small business houses find themselves harassed and hassled by this dubious state of affairs on the part of LBT Departmenty. Even for a small trader, submitting of Xerox copies of all sale and purchase bills will be an arduous task and ultimately the harassment,” said the traders.

Why are the traders up in arms against LBT?

Traders think that the tax is a monster. Under LBT, the onus to assess, compute and pay local tax will be on them.

As per the rules, all traders will be required to check their LBT liabilities by compiling the list of goods they procured within a month and feed the details into software provided by their municipal corporations. After computing the liability, they can pay the tax online, through cheque, demand draft or cash. The payments would be accepted at banks designated by the municipal corporations or at offices of civic bodies.

Why traders don’t want it? Traders have two key objections to LBT:

First, they do not want the responsibility of computing their own tax liability because that would mean additional expenses for them.

Second, they say they are already paying Value Added Tax, or VAT, and LBT will expose them to the perils of double taxation.