The Times of India          15.10.2013

No civic body deadline for Navi Mumbai Municipal Corporation yet to come up

NAVI MUMBAI: City traders will have to wait a little longer for the official announcement on reduction of Local Body Tax (LBT) levied by the civic body.

Recently, the Navi Mumbai Municipal Corporation (NMMC) officials had a meeting with the traders' association to hear grievances of the mercantile community. In the meeting, representatives of 18 associations discussed the LBT issue with the civic officials and urged the civic body to have a uniform tax system instead of levying different slabs of the LBT for goods, soft drinks etc.

"The mercantile association has tabled their problems before the corporation. Before taking the proposal ahead,

The corporation is waiting for more suggestion from traders who are yet to come before the civic body with their grievances," said Sudhir Cheke, deputy municipal commissioner, NMMC (Cess) to TOI.

Meanwhile, a senior Mantralaya official said that the entire process of reducing the LBT is lengthy one and one cannot set a deadline for the completion of the procedure. "What is the quantum of tax to be reduced and on which sectors are yet to be decided.

Once the NMMC completes the formal procedure, the proposal will has to be forwarded to Mantralya for its approval. The process will take at least a couple of months. Possibility of completing the procedure before Diwali seems very bleak," he said.

Last month, TOI was the first to reported that CM Prithviraj Chavan had, in principle, agreed to reduce LBT in Navi Mumbai to 1.5% from the existing 2%. Prior to LBT, the NMMC use to collect cess. The annual collection of the cess was nearly Rs 425 crore. But after introduction of the new tax structure, NMMC has estimated the collection to be around Rs850 crore.

The ruling DF government had, last year, announced introduction of LBT in various cities to replace octroi or cess. LBT is a tax that is levied on the entry of goods for use and consumption within the jurisdiction of local municipal body.

NMMC's annual revenue collection prior to LBT: Rs 425 crore

Estimated annual revenue collection after replacing cess with LBT: Rs 850 crore

LBT tax structure:

Major goods: 2 per cent

Soft drinks: 3 per cent

Liquor: 7 per cent