The Times of India            22.05.2013

'LBT said to generate more revenue'

PUNE: With the brouhaha around the local body tax finally settled, the civic body is already calculating the additional revenue that would flow into its coffers this fiscal. Compared to octroi, LBT is a stricter tax regimen making its evasion difficult and is also applicable to more trades, said officials, reasoning why this new tax will generate more revenue than octroi did.

Officials have done their math. Mahesh Phatak, commissioner of Pune Municipal Corporation told TOI that the civic body's monthly earning from octroi payments was Rs 100 crore. "If we look at LBT payments until the May 20 deadline (without fine), the PMC earned Rs 40 crore, when only 5 % registered traders had made the payment. If all registered traders make their payment, the revenue from LBT will be much more," Phatak said, adding that even if half the traders make the payment, the collection will still be higher than octroi.

Officials said that along with the regular LBT payment, the fine and interest levied for late payment would add to the revenue. Traders, who will make their LBT payments now, will have to also pay a fine, which is in the form of 2 per cent more LBT, and an interest would also be levied for late payment.

Industries, liquor shops and oil companies had paid the tax well on time and nearly 4,500 traders made the payment since May 1. Payments have been made through demand drafts, cash, cheque and internet banking. Over 63,000 traders in the city had registered for LBT till April 30, the deadline set by the civic body.

Octroi, a key revenue source for the civic body, was replaced by LBT on April 1 this year. In 2012-13, the civic body had registered revenue of Rs 1,300 crore from octroi. Officials working in the LBT department of the PMC said awareness about LBT was increasing.

The PMC was facing financial crunch since LBT's implementation, but traders have come forward in large numbers to pay the tax in the last three working days before the deadline. The PMC received payments worth Rs 4 crore last Friday, Rs 11 crore on Saturday and Rs 25 crore on Monday, May 20. The stir was called on Tuesday night.