Business Standard

Maharashtra mulls purchase tax to replace local body levy

Traders oppose new tax proposal fearing it may lead to cascading effects

Sanjay Jog  |  Mumbai 

The beleaguered Congress-Nationalist Party (NCP) government in Maharashtra, which faced a strong opposition from during general elections, has proposed to introduce a new tax to abolish the controversial local body tax (LBT) in 26 municipal corporations, excluding Brihan Mumbai Municipal Corporation.  According to the proposal drafted by the finance and sales tax departments, the tax will be part of the (value-added tax) Act after some modification.

The new tax, which will be a form of purchase tax, will be linked to the five schedules, namely zeo per cent , one per cent, five per cent, 12.5 per cent and 25 per cent and will be in small percentage. The government proposed to keep a uniform rate as demanded by The tax, which was discussed with the just four days ago, will likely be imposed from November 1.



Chief Minister last week announced that the government was in the process of bringing out an alternate tax to repeal

has been quite aggressive in pressing for abolition of in the run-up to the assembly election, while the Bharatiya Janata Party had threatened to launch agitations opposing the same.

was introduced in in 2010 in a phased manner beginning with tier-III cities by scrapping the duty (tax levied on the entry of goods into municipal limits of by the municipal corporations of the state since 1965). In 2013, was also applied to tier-I and tier-II cities, except Mumbai.

The government had proposed returning to or introducing a three per cent surcharge on These proposals, however, were opposed by the

A senior official told Business Standard: “Under the new tax regime a separate challan will have to be paid for its payment in department. The same tax will be transferred to the respective municipal corporation automatically. Hence, the autonomy of the municipal corporation is here to stay as is their revenues. The exempted categories in such as sugar, textiles and food grains will not attract the new tax.”

Only companies in the municipal corporation area and those registered with department would pay the new tax, added the official.

“The exemption will be according to rules, where the turnover is up to Rs 10 lakh. Besides, penalty and interest will be also be according to Act. Separate annexure for purchase returns will be filed with returns,” the official said.  However, various bodies representing the trading community have opposed the new tax proposal. They said the government was again getting into one more format for assessment that was not acceptable.

TAX TALES
  • According to the proposal drafted by the finance and sales tax departments, the tax will be part of the Act after some modification
  • Chief Minister last week announced that the government was in the process of bringing out an alternate tax to repeal LBT
  • was introduced in in 2010 in a phased manner

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Maharashtra mulls purchase tax to replace local body levy

Traders oppose new tax proposal fearing it may lead to cascading effects

Traders oppose new tax proposal fearing it may lead to cascading effects The beleaguered Congress-Nationalist Party (NCP) government in Maharashtra, which faced a strong opposition from during general elections, has proposed to introduce a new tax to abolish the controversial local body tax (LBT) in 26 municipal corporations, excluding Brihan Mumbai Municipal Corporation.  According to the proposal drafted by the finance and sales tax departments, the tax will be part of the (value-added tax) Act after some modification.

The new tax, which will be a form of purchase tax, will be linked to the five schedules, namely zeo per cent , one per cent, five per cent, 12.5 per cent and 25 per cent and will be in small percentage. The government proposed to keep a uniform rate as demanded by The tax, which was discussed with the just four days ago, will likely be imposed from November 1.

Chief Minister last week announced that the government was in the process of bringing out an alternate tax to repeal

has been quite aggressive in pressing for abolition of in the run-up to the assembly election, while the Bharatiya Janata Party had threatened to launch agitations opposing the same.

was introduced in in 2010 in a phased manner beginning with tier-III cities by scrapping the duty (tax levied on the entry of goods into municipal limits of by the municipal corporations of the state since 1965). In 2013, was also applied to tier-I and tier-II cities, except Mumbai.

The government had proposed returning to or introducing a three per cent surcharge on These proposals, however, were opposed by the

A senior official told Business Standard: “Under the new tax regime a separate challan will have to be paid for its payment in department. The same tax will be transferred to the respective municipal corporation automatically. Hence, the autonomy of the municipal corporation is here to stay as is their revenues. The exempted categories in such as sugar, textiles and food grains will not attract the new tax.”

Only companies in the municipal corporation area and those registered with department would pay the new tax, added the official.

“The exemption will be according to rules, where the turnover is up to Rs 10 lakh. Besides, penalty and interest will be also be according to Act. Separate annexure for purchase returns will be filed with returns,” the official said.  However, various bodies representing the trading community have opposed the new tax proposal. They said the government was again getting into one more format for assessment that was not acceptable.

TAX TALES
  • According to the proposal drafted by the finance and sales tax departments, the tax will be part of the Act after some modification
  • Chief Minister last week announced that the government was in the process of bringing out an alternate tax to repeal LBT
  • was introduced in in 2010 in a phased manner
image
Business Standard
177 22

Maharashtra mulls purchase tax to replace local body levy

Traders oppose new tax proposal fearing it may lead to cascading effects

The beleaguered Congress-Nationalist Party (NCP) government in Maharashtra, which faced a strong opposition from during general elections, has proposed to introduce a new tax to abolish the controversial local body tax (LBT) in 26 municipal corporations, excluding Brihan Mumbai Municipal Corporation.  According to the proposal drafted by the finance and sales tax departments, the tax will be part of the (value-added tax) Act after some modification.

The new tax, which will be a form of purchase tax, will be linked to the five schedules, namely zeo per cent , one per cent, five per cent, 12.5 per cent and 25 per cent and will be in small percentage. The government proposed to keep a uniform rate as demanded by The tax, which was discussed with the just four days ago, will likely be imposed from November 1.

Chief Minister last week announced that the government was in the process of bringing out an alternate tax to repeal

has been quite aggressive in pressing for abolition of in the run-up to the assembly election, while the Bharatiya Janata Party had threatened to launch agitations opposing the same.

was introduced in in 2010 in a phased manner beginning with tier-III cities by scrapping the duty (tax levied on the entry of goods into municipal limits of by the municipal corporations of the state since 1965). In 2013, was also applied to tier-I and tier-II cities, except Mumbai.

The government had proposed returning to or introducing a three per cent surcharge on These proposals, however, were opposed by the

A senior official told Business Standard: “Under the new tax regime a separate challan will have to be paid for its payment in department. The same tax will be transferred to the respective municipal corporation automatically. Hence, the autonomy of the municipal corporation is here to stay as is their revenues. The exempted categories in such as sugar, textiles and food grains will not attract the new tax.”

Only companies in the municipal corporation area and those registered with department would pay the new tax, added the official.

“The exemption will be according to rules, where the turnover is up to Rs 10 lakh. Besides, penalty and interest will be also be according to Act. Separate annexure for purchase returns will be filed with returns,” the official said.  However, various bodies representing the trading community have opposed the new tax proposal. They said the government was again getting into one more format for assessment that was not acceptable.


TAX TALES
  • According to the proposal drafted by the finance and sales tax departments, the tax will be part of the Act after some modification
  • Chief Minister last week announced that the government was in the process of bringing out an alternate tax to repeal LBT
  • was introduced in in 2010 in a phased manner

image
Business Standard
177 22