NMC freezes bank accounts of 836 traders for recovery of LBT dues of Rs 101.93 crore

Staff Reporter :

Stepping up its drive to recover the dues of Local Body Tax (LBT), Nagpur Municipal Corporation (NMC) has frozen 836 accounts for recovery of dues to the tune of Rs 101.93 crore. These 836 accounts are of traders. The action has created quite a stir among traders. LBT Department of NMC had assessed LBT demand of Rs 81,66,84,355/- in 638 cases for the year 2013-14. The demand amount was arrived at after scrutiny of the returns filed by traders/businessmen. In the year 2014-15, demand of Rs 20,26,58,304/- was arrived at in 198 cases on the basis of returns filed by the traders/businessmen. Thus, in total 836 cases, total LBT dues were pegged at Rs 101.93 crore.

“As the traders concerned did not take note of the tax assessment, LBT Department decided to freeze their bank accounts to recover the dues,” said Milind Meshram, Assistant Commissioner, LBT Department. Earlier this year, in the budget submitted to Standing Committee, Abhijit Bangar, Municipal Commissioner, had set the target of recovering Rs 10 crore of LBT dues in 2019-20. While presenting NMC’s budget for the year 2019-20, Standing Committee chief Pradeep Pohane had made it clear that many traders did not give ‘desired response’ to the issuance of tax demands for recovery of LBT dues.

Hence, he had mooted LBT One Time Settlement Scheme-2019. LBT was abolished for most traders in Maharashtra in 2015. However, as it was applicable in case of traders having quarterly turnover of more than Rs 50 crore, NMC called for filing of returns for the years 2013-14, 2014-15, 2015-16, and 2016-17. The tax dues are for the period from April 1, 2013 (when LBT came into effect) to June 30, 2017 (when LBT was abolished completely and Goods and Services Tax came into being from July 1).

After scrutiny, NMC issued notices to traders who did not file returns or the traders who did not respond to tax demands sent to them. Later on, NMC obtained the data for turnover of such traders from Sales Tax Department. Based on that data, it started recovery of LBT dues. Still, many traders did not respond to NMC. Owing to dues of LBT, NMC was unable to meet the annual target of tax collection. As a result, this affected its financial health. Hence, now NMC appears to have adopted a tough stand for recovery of LBT dues.