March 26, 2015: In a major move, the Maharashtra government has decided to abolish Local Body Tax (LBT), effective August 1, 2015. In order to compensate the trading community, it has also been decided that Value Added Tax (VAT) rate will be increased. Maharashtra had been voicing its concerns with the LBT and have always batted for a unified tax structure like Goods and Services Tax (GST).
Maharashtra Budget was announced on March 25, 2015 by State Finance Minister Sudhir Mungantiwar. In his maiden budget the minister announced scrapping of LBT and the government is currently looking for an alternative tax structure. The minister has also promised that once LBT is proposed, there won’t be double taxation in Mumbai. The LBT was introduced by the previous Congress-NCP government with an objective to replace Octroi. However, Octroi was replaced in all municipal corporations in Maharashtra except Mumbai.
