BMC working to make ‘trader-friendly’ transition

Unlike octroi,which is collected in cash daily at check posts,LBT is an account-based regime under which traders and businessmen will make monthly payments by way of self-declaration.

However,maintaining separate account books,ensuring timely payment and filing half-yearly and annual returns may be a burden for small businesses with a turnover of over Rs 3 lakh. As per the definition of ‘dealer’ in LBT Rules 2010,practically everyone with a turnover of over Rs 3 lakh and importing goods worth over Rs 5,000 will have to register. This has been introduced to remove bottlenecks in tax collection and expedite goods movement. BMC has estimated that at present,octroi evasion in the city is as high as 60 per cent.

Traders have also cited the fear of undue interference from the government. For this,the civic body is preparing a set of guidelines that will safeguard traders’ interests.

“We have formed a committee with ex-BMC officials who have worked on guidelines for sales tax to help us frame norms for LBT. We are drawing up criteria that will have to be fulfilled before any raid is conducted,” said Jalota.

Traders say LBT will lead to double taxation that will ultimately affect citizens. The civic administration reiterated that it would maintain revenue neutrality to safeguard the end consumer. Goods will be taxed in slabs of 4,5 and 12 per cent.

“The amount of tax traders will pay under LBT will not be more than the octroi presently charged,” said Jalota.