Even before Local Body Tax (LBT) was imposed in lieu of octroi in Nagpur from April 2013, traders were up in arms against this move, because from a simple procedure of collecting tax at city boundary while bring goods inside city limits was made complex and burdensome in LBT by making it accounts & reporting based tax.
And as per Rule 3 of Bombay Provincial Municipal Corporations (local body tax) Rules 2010 practically all, like Traders, Industrialists, professionals like Chartered Accountants, Doctors, Advocates, Transporters, Hospitals, Broker, Agent, Railways, Insurance & Financial Companies, Advertisement Agencies, Banks, Clubs, Central and State Government Departments which buys, sells, supplies, distributes or imports goods directly or otherwise and others are required to get registered under LBT.
Soon traders from entire state were up in arms against LBT; traders even suggested that to cover revenue loss from withdrawal of LBT, state government can increase VAT marginally; another suggestion being adding surcharge on VAT.
However Devendra Fadnavis Government came out with a brilliant solution of increasing threshold limit from Rs. 5 Lakh for applicability of LBT to Rs. 50 crore and accordingly published draft rules namely ‘Maharashtra Municipal Corporations (Local Body Tax) (Amendment) Rules 2015 by Notification No. LBT-2015 CR-47/UD-32 on 23.07.2015 calling suggestions and objections by email on firstname.lastname@example.org or SMS on 9757241085 on or before 31.07.2015.
Accordingly Vidarbha Taxpayers Association (VTA) called upon a meeting of Office Bearers on this issue, wherein VTA President J. P. Sharma categorically welcomed this proposed amendment by which almost 95% of LBT registered dealers will be out of ambit of LBT after they apply for cancellation of LBT number under Rule 17 before the Commissioner of the Local Body.
Tejinder Singh Renu, secretary of VTA also appreciated this as win-win situation for the taxpayers as almost after 2 years of constant fight against LBT, this proposed amendment has brought sigh of relief. Most significant part is that maximum taxpayers will escape from LBT after cancellation of their LBT number and industries that feared increase in VAT are also addressed satisfactorily.
Vidarbha Taxpayers Association by email has supported this proposal of the state Government and also expressed gratitude to the Chief Minister Devendra Fadnavis for coming out with this wonderful solution, however requested that LBT as such should get immersed in GST once implemented from April 2016.
VTA also requested taxpayers to send SMS in support of this proposal as if we object the issue will go into debate and LBT on 95% of the taxpayers will continue and state government will have rightful claim that our proposal to relax LBT has been refused by taxpayers hence LBT continues.