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'Maharashtra government is deceiving taxpayers with local body tax'

Friday, 15 March 2013 09:55 administrator
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The Times of India                  14.03.2013

'Maharashtra government is deceiving taxpayers with local body tax'

NAGPUR: Vidarbha Taxpayers Association, which is planning to approach the high court against the imposition of local body tax (LBT) from April 1, has termed the tax as a deceit by state government.

VTA president JP Sharma said that enforcement of LBT is a breach of trust by state government. He pointed out that when MVAT was proposed in early 2000, the state government had promised withdrawal of all taxes, including octroi. "However, replacing octroi with LBT or any other form of tax was never intended," he said.

Sharma said later government started announcing that octroi should be merged once Goods and Service Tax (GST) is enacted and the same was openly declared by many state ministers including chief ministers. "Now, when GST is on the verge of being implemented, state government came up with this unique idea of replacing octroi with more burdensome LBT. They are misleading people by saying they have abolished octroi and introduced more trader-friendly act," he said.

VTA secretary Tejinder Singh Renu said, "Many citizens are under the impression that LBT is to be paid by traders and hence they are free of octroi. However, they are under wrong impression, as final burden of LBT will fall on end users. Moreover, not only traders, but as per the definition of dealer in LBT Rules 2010, practically everyone with turnover of over Rs1 lakh and importing goods over Rs5,000 would be required to get registered under LBT."

Now, VTA is in the process of seeking legal opinion on this as well as other lacunae in the rules, including their Constitutional validity. "If VTA finds any illegal provision, the association will challenge the same and seek justice by filling petition before Mumbai high court's Nagpur Bench before March 31, 2013," said Sharma.
Last Updated on Friday, 15 March 2013 09:58
 

Local body tax will help raise revenue, says Pathak

Friday, 15 March 2013 09:17 administrator
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The Times of India                  14.03.2013

Local body tax will help raise revenue, says Pathak

As against the common belief, Pune's municipal commissioner Mahesh Pathak believes that the implementation of the local body tax (LBT) will actually help the municipal corporation earn more.

Addressing a press conference on Wednesday, Pathak said, "The process of levying the local body tax, as compared to octroi, is simple. Even the tax rates are lower. So we expect more and more traders to register with us which will eventually help us earn more revenue."

Pathak said the information from the sales tax department, PMC's property tax department and the water department has been compiled to create a data bank of traders. There are around 3.45 lakh traders who will come under the purview of the local body tax. The administration will start the process of registering the traders from March 14.

Octroi has always been a major source of income for the PMC with almost 40% of its revenue coming from this source. The local body tax will replace octroi from April 1. The PMC expects an income of Rs 1,300 crore from octroi till March 31, 2013.

Vilas Kanade, head of the octroi department, said that traders can register themselves at 16 centres across the city. Fifteen centres have been set up at 15 ward offices while one centre has been established at the octroi department office near the PMC headquarters in Shivajinagar. Online and offline registration facilities are available.

The details of registration have been uploaded on the PMC's official website www.punecorporation.org

"The traders can register themselves online or they can visit one of the 16 centres," Kanade said.

Traders are opposing the local body tax citing ambiguities at the municipal corporation level.

Pathak refuted the traders' charge. "The civic administration has interacted with the traders and clarified its position. Some of the issues raised by traders relate to state and union governments and those can not be sorted out at the PMC level," Pathak said.

What is local body tax

The state government has decided to replace octroi with the local body tax. The new tax structure will come into force from April 1. All traders who import good over Rs 5,000 will have to register themselves with the local self-government body.

The government has put all the products in different categories and rates of local body tax have been defined as per the category. The civic administration along with the state government will review the tax rates every year.

Last Updated on Friday, 15 March 2013 09:28
 

Pay property tax by June 30 or you’ll be fined 2% of bill amount

Friday, 15 March 2013 09:13 administrator
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The Times of India                  14.03.2013 

Pay property tax by June 30 or you’ll be fined 2% of bill amount

MUMBAI: The municipal body's decision to extend the due date for payment of property tax bill from March 31 to June 30 has come as a temporary relief for citizens. But the fundamental issue of paying bills with retrospective effect from April 2010 and the alleged faulty capital value method of computing the tax still exist.

Moreover, now the Brihanmumbai Municipal Corporation (BMC) has decided to impose a penalty of 2% per month on those who do not pay the bills by June 30.

Citizens are still unconvinced about the new system.

"The extra three months are welcome, but it doesn't solve the core issue of the formula itself, where property tax is computed on the basis of the Ready Reckoner rate, which is faulty, irrational and discriminatory. Residents living on a property in the suburbs end up paying more than those living on a property in south Mumbai," complained advocate Godfrey Pimenta, who lives in Marol.

The new property tax system has adversely affected senior citizens, too, who live on pensions.

While the New Delhi Municipal Corporation provides concessions on property tax to senior citizens, the BMC does not

"With inflation rising every year, it will become very difficult for retired senior citizens to bear the heavy tax burden. As such, they should be granted concessions," said Pimenta.

Coleman Pereira, a senior citizen from Pali Village in Bandra (W), said that retired people live on their meagre savings and will face difficulty paying the hefty taxes.

"Our pension doesn't increase in accordance to inflation. So, if the rate of inflation has increased by 10%, my earning through pension does not rise from Rs 100 to Rs 110,"explained Pereira, who lives in a cottage in Pali gaothan.

"If property tax is computed with the capital value system, it almost doubles for my cottage doubles from Rs 3,572 to Rs 6,000 per year. The BMC has not even inspected my premises. My house has load-bearing walls, but is classified as an RCC construction," he said.

Charitable organisations and religious institutions, who are dependent on charity to help orphans, disabled and senior citizens, complained that the new property tax system will burden their resources.

St Catherine's Home in Andheri (W) and Holy Cross Church in Kurla have received staggering bills amounting to lakhs. "We have got a bill of Rs 7 lakh with retrospective effect from April 2010. Catholic charitable trusts and institutions never default in paying government bills. We run our churches and institutions on donations; they are not profitable trusts. We strongly protest against the new property tax bill sent by the L ward office in Kurla,"said Father Pascal from Holy Cross Church.
Last Updated on Friday, 15 March 2013 09:17
 
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