Protesting the move by the state government to levy Local Body Tax (LBT) replacing the existing Octroi, the Federation of Associations of Maharashtra (FAM) has decided to go on indefinite strike from April 22. The statewide strike is set to accrue an estimated loss of Rs 25,000 crore in various tax collections for the government. FAM, representing over 750 trade associations in the state, will commence a peaceful morcha from FAM's office in Camac Bunder to Azad Maidan and Mantralaya followed by a car rally on April 24 and even bigger rally two days later. The strike will be initially be joined by leading traders in Maharashtra which will be later extended to all ration shops and even tea and fruits venders on local street causing thereby a serious problems for consumers. The state government proposed to levy LBT replacing the existing Octroi with more complicated structures and harrassmentfrom local municipal corporations that are empowered to collect the tax from trades. "We are not opposing tax levy but, only another window of corruption as local municipal authorities have started calling for 10-year of income papers to scrutinize LBT instead of 6-year in the case of Octroi. LBT, therefore, has opened another window for traders' harassment," said Mohan Gurnani,President of FAM. "Under the new LBT regime, all business people with a daily turnover of Rs 822 per day will have to register with the municipal corporation which means the License Raj has revisited.
Secondly, even pan shop, chana shop, tea stalls, fruits vendors etc on the street have to get them registered assuming they would be selling more than Rs 822 per day which was revised on Thursday by the Chief Minister Prithviraj Chauhan from Rs 374 per day earlier. While the government has kept essential commodities out of LBT, all luxury items in daily foods including dry-fruits would attract Rs 35 a kg against Re 1 a kg now resulting into more traders would go for tax evasion. Through LBT proposal, the government has closed three Octroi window but opened thousands of new windows for local municipal officers. LBT in all municipal corporations would differ depending upon the proximity of Mumbai. While for the main Municipal Corporation of Greater Mumbai, the LBT is proposed at 3%, the same works out to 2% and 1% for Navi Mumbai and Vasai-Virar Municipal Corporation. The burden is expected to come finally on consumers which may result into lower of business volume and shifting of trading bases from Maharashtra to other states, feared Ashok Bafna, president, Bombay Metal Exchange. Therefore, we do not want LBT. Let the government wait for one more year for uniform Goods and Services Tax (GST) to be introduced across the nation replacing all state taxes, said Gurnani.