While welcoming the Maharashtra Government’s recently decision to shut down the Local Body Tax (LBT) department in all municipal corporations by April 30, leading trade and industry bodies on Monday said they would resort to agitation if the Government extends the deadline. Following persistent efforts by all stakeholders and direct engagement with Chief Minister Devendra Fadnavis, the Urban Development Department has recently announced the closure of LBT departments across the State by April 30. However, some municipal corporations are reportedly seeking a one-year extension.

 

Office-bearers of Chamber of Associations of Maharashtra Industry and Trade (CAMIT), Vidarbha Industries Association (VIA), Nag Vidarbha Chamber of Commerce (NVCC), Nagpur Chamber of Commerce Limited (NCCL), and Vidarbha Taxpayers Association (VTA) have jointly welcomed the Government’s decision emphasizing that it is not a victory of traders over the Government but a testament to the Government’s commitment to resolving long-standing issues of the business community and promoting ease of doing business. Elaborating on the matter at the press conference held here, Dr Dipen Agrawal, President of CAMIT, highlighted that between 2010-11 and 2012-13, the average annual octroi collection in Nagpur was Rs 425 crore. During the LBT period (April 1, 2013, to July 1, 2017), potential revenue from octroi would have ranged between Rs 1,500 crore and Rs 1,700 crore. However, the Nagpur Municipal Corporation (NMC) collected significantly higher amounts and also received compensation and grants from the state government, by way of 1 per cent cess on real estate transactions which was introduced in 2013, followed by a Rs 40 crore per month grant after the partial abolition of LBT in 2015. After LBT abolition, the corporation revenue has been protected through statutory grants under the Maharashtra Goods and Services Tax (Compensation to the Local Authorities) Act. In 2018, LBT officials claimed Rs 1,000 crore was due from traders, including Rs 700 crore in assessed dues.

 

However, six years later, the department now claims arrears of Rs 3,200 crore. Dr Agrawal questioned the basis of these inflated figures and urged the Government to stand firm on its decision to close the LBT department without dilution or extensions. Girdhari Mantri, representing VIA, pointed out that many manufacturing units of VIA members are located outside city limits and were not liable for LBT. However, the LBT department still assessed them and issued unjustified demands simply because their registered offices were within municipal limits.

 

Arjundas Ahuja, President of NVCC, highlighted the hardships traders faced due to LBT since 2013. “NVCC’s LBT camps in 2018 and 2020 revealed numerous inflated and unreasonable tax demands,” he added. Tarun Nirban, representing NCCL, noted that NMC had already downsized the LBT department due to minimal collections, with staff reductions over the past two to three years making the department nearly non-functional. Sharavan Malu, President of VTA, underscored the compensatory measures given to municipal corporations over the years. J P Sharma, Sachin Puniyani, Tejinder Singh Renu, Narayan Toshniwal, Pradeep Jajoo, Dhyaneshwar Rakshak, Keval Ramani, Rakesh Gandhi, Suryakant Agrawal, Umesh Patel, Harman Bawecha, Husain Noorallha Ajani, Sanjay K Agrawal, Vice President of CAMIT, and others were present in the press conference.