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.