The state government, which had announced in March that the contentious Local Body Tax (LBT) would be abolished from August 1, has been keeping 26 municipal corporations in the state guessing about the alternative to LBT.
Presenting the BJP-Shiv Sena government’s first budget for 2015-2016, Finance Minister Sudhir Mungantiwar had announced that the government intended to abolish LBT, which was introduced in April 2013.
However, since then, the government has not announced an alternative to LBT, like it was done by the Congress-NCP government which had replaced octroi with LBT. Also, there is no clarity whether LBT would actually be scrapped.
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Pimpri-Chinchwad Municipal Commissioner Rajiv Jadhav, who was in Mantralaya on Wednesday ostensibly to find out whether any decision regarding LBT had been taken, said, “So far, there seems to be no decision on this count. PCMC is also waiting for the government announcement.”
PMC’s Additional Municipal Commissioner Rajendra Jagtap said there were no specific directions on abolition of LBT in PMC area from August 1 as declared by state government in the past. “However, it is learnt that the LBT would not be scrapped completely and those traders and industries having turnover over Rs 50 crore would still have to pay LBT,” he said.
Accordingly, the PMC has started collecting information on traders who have turnover of over Rs 50 crore. Jagtap said,”PMC would also take help of sales tax department to identify traders having turnover of over Rs 50 crore.”
Praveen Pardeshi, Principal Secretary to the Chief Minister, also confirmed that no final decision had been taken on LBT abolition.
Officials, however, said the government was committed to abolition of LBT.
Shiv Sena leader Neelam Gorhe said even if the government wanted to announce its decision vis-a-vis LBT scrapping or not, it could not do so as the Opposition was not allowing the House to function.
The LBT had replaced octroi in 25 municipal corporations except Mumbai. After LBT regime came into being, traders protested arguing it was a tax aimed at harassing them as it involved unnecessary paper work and threatened to bring back inspector raj. The issue was made a major poll plank during the election campaigning last year by BJP, which promised to abolish LBT when it came to power.
However, just a fortnight left for LBT regime to end, the government has not declared as to how it will compensate the civic bodies.
For instance, PMC’s last fiscal’s LBT collection was Rs 1,200 crore. PCMC’s was Rs 1000 crore. Officials said the total LBT collection of all 26 municipal corporations, except BMC, stood between Rs 6,000-7,000 crore. “We have no clue what is coming our way. There are speculations that stamp duty collection job would be handed over to civic bodies,” said a civic official.