Saturday, June 15, 2013: While octroi will continue in Mumbai, LBT has already been imposed in many other cities of the state. Why this discrepancy in Maharashtra?
By EB Bureau
After a month-long agitation by the state traders, the Maharashtra government has decided to postpone the enforcement of the local body tax (LBT) in Mumbai until a consensus is reached with the traders. This was decided at a recent meeting between chief minister Prithviraj Chavan and the Federation of Associations of Maharashtra (FAM). This means that octroi will continue in Mumbai till a decision is reached by June end. However, the LBT has already been enforced in many other cities of Maharashtra like Thane, Navi Mumbai and Pune. While the Pune traders were actively participating in the agitation to revoke LBT from Pune, no decision has been taken yet on that front.
According to Mitesh Mody, action committee member, FAM, and committee member, All India Radio and Electronics Association, west zone (AIREA WZ), the LBT will continue in the cities where it has already been imposed, until the proposals of the Mumbai traders are accepted by the government, as the traders want uniformity in the LBT system across Maharashtra.
Says Mody, “In an earlier meeting with the traders, the state chief minister, Prithviraj Chavan, had said that traders have no issues in the other cities where the LBT has already been imposed. However, this is not correct. In the first month, the traders were happy with the LBT as they thought that they got a respite from the corrupt officials who collected octroi. But when they realised that the harassment continues under the LBT also, they too turned anti-LBT. The powers given to low level officers of the municipal corporation are being misused and the traders are finding the whole process impractical. So, now traders from Pune have also given it in writing to the chief minister that they don’t want to be assessed by the municipal corporation.”
Other demands met
The government will now set up a committee led by a chief secretary, which will finalise the LBT model for Mumbai, informs Mody. Traders have been given the right to nominate their representatives on this committee, which would submit its report by June end. The committee will also look into the traders’ demand that the sales tax department should be given the power to collect and assess LBT. After the partial success of the meeting between the chief minister and FAM, traders have suspended their protest till the committee submits its report.
Demand for uniformity in LBT system
There are two Acts that govern the duty and tax structure within the state—the Maharashtra Municipal Corporation Act and the Bombay Municipal Corporation (BMC) Act. The first has already been passed in the Vidhan Sabha, after which the LBT came into being in Maharashtra. This implies that for all municipal corporations, except Mumbai, the law for the LBT was passed by the state legislature in December 2009. It has been delayed for Mumbai because the necessary provisions for the introduction of the LBT are yet to be incorporated in the Bombay Municipal Corporation Act, which would also require legislative approval.
“The BMC Act, which is only for Mumbai, hasn’t been passed yet and it will be now amended by the newly formed panel of traders and government representatives,” informs Mody.
Now the traders want to ensure that their accountability to the municipal corporation for LBT is shifted to the state’s sales tax department. “We also want uniformity in the LBT system. For traders who have offices in multiple cities of Maharashtra, the tax would differ from city to city. We want the rate of tax to be linked to the city in which a firm’s registered office is located,” adds Mody.
