Published On : Fri, May 17th, 2013
Business News | By Nagpur Today Nagpur News

NVCC Condemns half truth of NMC, Shops still to be closed


NVCC condemns half-truth being brought forward by NMC before the people. Shri Mahesh Dhamecha, Assistant Commissioner has stated to media persons that LBT is beneficial for people & traders. In this regard, we would like to put forth following questions to NMC to reply openly in public.

  1. No Inspector Raj : Mr. Dhamecha has refused that LBT would bring in Inspector Raj. In this regard we would like to inform that the Urban Development Department of Maharashtra Government vide their letter dated 02.05. 2013 has directed all Municipal Commissioners of the State to take prior approval of Principal Secretary, Urban Development before making any search & seizure at any trader’s place. In the said letter Government has admitted that inspite of clear directives from the Government , Municipal Employees & Officers are visiting shops of various traders for various reasons & this is a matter of concern to Government. This is clear admission by Government that the Municipal Officers are not following the directives of Government & therefore the apprehension of traders that LBT will bring in Inspector raj is not unwarranted. Even otherwise the Urban Development has only issued directives to Municipal Commissioner vide a simple letter, the fact remains that there is no such amendment in the rules to prevent inspector raj.
  2. Delayed Payment Interest : Mr. Dhamecha has stated that Government has brought down , the interest on delayed payment from 3 % p.m. to 2 % p.m. This is also misleading as even earlier the interest rate was 2% only for delay upto 1 year. Let Mr. Dhamecha & Government clarify whether 2% per month interest for delayed payment is legitimate? When in all other Commercial taxes the interest for delayed payment is between 1% to 1.25% p.m. only. At the same time when there is delay in refund by Municipal Corporations there is going to be no interest paid to dealer . Moreover the LBT rules also does not prescribe any time limit to grant refund to traders.
  3. Enhancement of limit for Registration : Mr. Dhamecha has stated that the Turnover limit for registration for Non importers has been increased to Rs.4 Lacs from Rs. 1.5 Lacs. We request him to kindly declare how many traders are going to benefit from such meager increase in the turnover limit?

Even otherwise such dealers who are non-importers were not paying any Octroi, so instead of relief, actually LBT is going to cover such non importer dealer under its gambit.

  1.  Lump Sum payment dealers : Mr. Dhamecha has stated that dealers opting for Lump sum payment do not have to file returns. The fact remains that Lump sum payment scheme is restricted to turnover upto Rs. 10 Lacs annual turnover only. Such dealers are in general dealing within the city limits only & even otherwise they are not liable to pay LBT. Therefore there is no question why such dealers shall opt for Lump sum payment scheme. This has been admitted by Principal Secretary Urban Development also  that the response to Lumpsum registration is very poor and there are only handful of dealers who have opted for the scheme in any city. Therefore in fact asking such dealers for registration is a burden on them & not a relief  of any sort.
  2. Dealers purchasing items from local market : It has been stated by Mr. Dhamecha that dealers purchasing from local market does not have to make payment of LBT. Inspite of this being fact no one is answering the basic question that if LBT is a tax on import of goods in city then why such dealers are required to register with the LBT department? If a trader is not providing any services , he is not required to get register with service tax department. NVCC shall be grateful if Government or NMC comes up with proper justification for getting such dealers registered with LBT department who are purchasing from local market only.
  3. Dealers can make payment up to 20th of every month : Although the payment date has been extended to 20th of every month but the fact remains that the date for filing of return remains as 15th after the half year & year end. Does the Government & NMC think that return can be filed before making the payment? Unless the date for return filing is extended the extension of date for payment shall not be fully effective.
  4. Penalty has been reduced : Even the reduced penalty is very excessive & it needs a relook by the Government. Imagine a penalty of Rs. 5000/- just for non-compliance of any notice by the department.
  5. Prices of Commodities shall go down because of implementation of LBT :Mr. Dhamecha has mentioned that prices of few commodities shall go down because of LBT . This is the biggest lie from a responsible officer for following reasons :
    1. a.      The budgeted collection of LBT is being shown to be more than Octroi. So in totality if the tax collection is proposed to be more than existing revenue than it clearly implies that the citizens shall have to shell out more from their pockets.


b.     Although LBT rates have been reduced in some items the fact is that LBT rates have been increased in more than 500 items as compared to Octroi.

  1. c.      It is being shown that because of LBT , prices of Petrol , Diesel & LPG shall come down. The fact remains that even without LBT , nothing prevented NMC from reducing the rates of Octroi on these items if the Corporation really wanted to do so ?


We therefore request the Government & NMC to introspect in matter of LBT. Our Chief Minister has time & again stated that the Tax is being paid by customers then why are traders opposing the same? We have also  time & again stated that the traders are providing gratuitous services of Indirect Tax collection from citizens & depositing the same to Government treasuery & therefore the number of such indirect taxes has to be limited. In LBT the compliance cost of the Act & Rules to traders is much high then the actual implication of Tax. We urge the Government to realize the same & take necessary steps to collect the required tax from the existing indirect tax structure of VAT or else collect it directly from the citizens as some direct tax without involving the trading community.

Traders Stage Dharna at Samvidhan Square (RBI Square)

Today a meeting of various trade organisations was convened at NVCC. During the meeting it was resolved to stage a dharna at Samvidhan Square. Thereafter more than 3000 traders walked in from NVCC office to Samvidhan square and organised a dharna in front of Dr. Babasaheb Ambedkar statue. There the gathering of traders was addressed by Shri Dipen Agrawal & Shri Radheshyamji Sarda President & Past president of NVCC respectively.  Ramdhun and National Anthem was sung to awaken the Government of Maharashtra from its deep slumber and to give them wisdom to withdraw LBT immediately. The Traders  took oath to continue their shops closed and continue the peaceful agitation against LBT till it is abolished from the state.

States in a press note issued by Shri Hemant Gandhi, Secretary of the Chamber.