In the run up to the state elections, the BJP had assured traders that local body tax (LBT) would be abolished from the state once they came to power. Riding high on this promise, a few traders stopped paying tax as a result of which the Pune Municipal Corporation (PMC) witnessed a drop in the collection of LBT in the past six months. Despite several reminders, the BJP-led government failed to pay heed to the PMC demand to initiate action against defaulters.
“The LBT has been the main revenue source of the PMC. It has shown a decrease in revenue collection from last October after the BJP promised to abolish it after it came to power,” said Mayor Dattatraya Dhankawade of the NCP.
He added that the revenue from LBT showed an increase every year but it had dropped in 2014-15 to Rs 1,146.35 crore from Rs 1,287.74 crore in 2013-14.
The authority to check account books of traders and initiate action against defaulters was based on the permission by the state government, Dhankawade said adding, “The PMC has sought the permission of the state government to initiate action against those failing to pay
LBT to the civic body. There have been five reminders with information of defaulters but the state government has not responded to any communication by the PMC.”
Instead of abolishing LBT from the start of the new financial year, the state government declared it to be implemented from August 1. “The PMC has to depend on LBT collection for the next five months but its experience of the past six months has not been pleasant. The civic body will suffer financial constraints if the traders don’t pay their LBT regularly and the state government does not permit action against defaulters,” he said.
Pointing out the impact of traders not paying LBT regularly, the PMC informed the state government that it collected around Rs 25 crore through LBT from gold and silver jewellery in 2013-14 but the collection dropped to Rs 6 crore in 2014-15. A list of 50 prominent jewellers were submitted to the state government to verify account books and visit their premises to check tax theft but there had been no permission for it. Most of the defaulters are big traders and computer firms importing goods from other cities.
According to the civic administration, they have to struggle to make the traders pay LBT. “We can hardly do any thing against the defaulters of LBT as the powers are with the state government. If no action is initiated against those who did not pay LBT in the last six months, then revenue collection of civic body in the next five months will decrease further,” said an LBT officer.