Despite giving assurance of complete abolition of local body tax (LBT) in the municipal corporation area from August 1, the BJP-led state government has issued a notification that has only waived off LBT for traders with an annual turnover of less than Rs 50 crore.
The tax will continue to be levied for traders with business of more than Rs 50 crore.
In a notification dated July 23, the state government said that the traders with more than Rs 50 crore of annual turnover needed to register themselves with the civic body while those with a turnover of less than Rs 50 crore should apply to civic body for removing their names from the list of taxpayers.
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The NCP, which controls the Pune Municipal Corporation (PMC), has opposed the move. “The state government’s decision would have an adverse impact on the financial situation of the PMC. It is politically motivated,” said Mayor Dattatraya Dhankawade.
He said the civic administration has informed the state government that of the total 70,000 traders registered with the PMC for LBT, only 121 traders had a turnover of over Rs 50 crore.
“The PMC’s revenue collection would drop by at least 70 per cent. There is no clarity on the compensation to the civic body on revenue loss as the LBT is not completely abolished,” Dhankawade said.
The mayor said the state government had taken this decision to keep small traders happy while ensuring that the government itself did not lose money by giving compensation to the civic body for loss of LBT.
“The PMC budget would suffer if the revenue target is not achieved. A resolution has been passed in the standing committee urging the civic administration to challenge the state government’s decision in court,” said Ashwini Kadam, chairperson of the standing committee in the PMC.
BJP leader Mukta Tilak said his party had promised complete abolition of the LBT in municipal corporations but it had to take a tough decision to ensure that the financial situation of the civic bodies did not get affected.
The Pune Vyapari Mahasangh has alleged the BJP of cheating the traders by not taking a decision on complete abolition of LBT.
“The government has retained LBT in the state for traders with turnover of over Rs 50 crore per year. This is a complete departure from the assurance given to traders by the BJP. The traders association would launch a statewide agitation and work against the BJP in the next civic elections,” a press statement released by the association said.