LBT row: Mumbai retailers shut shop

Over a million retailers have shut shop from Monday to protest against the Local Body Tax (LBT), which will replace octroi in Mumbai from October 1. LBT has already replaced octroi in the rest of Maharashtra.

Why traders are against LBT
Mumbai traders warn that inspectors of Brihanmumbai Municipal Corporation - known for endemic corruption - will fine them unnecessarily or demand bribes. At present, goods coming in to Mumbai are taxed at the entry points to the city. With LBT, inspectors can check any trader's books and impose fine of up to five times the disputed amount.

What is state government saying

Chief Minister Prithviraj Chavan has ruled out any roll back of LBT but said a committee will look into the issues raised by the traders. The state government has already made major changes, including bringing down the provision for penalties down to five times from 10 times; increasing the minimum turnover required for LBT payment from Rs 1 lakh to Rs 3 lakh and allowing maintaining of records on computers, instead of registers.

What's the strike Impact
Neighbourhood retail shops and wholesale trading in clothes, electronics, hardware, metals, cloth, foodgrain, fruit, vegetables and all types of manufacturing activities in Mumbai have been paralysed since Monday morning. It has inconvenienced millions of customers. Modern trade such as Big Bazaar and Reliance stores are, however, open.

So, what next?
A petition filed by a Pune trade body challenging LBT will come up for hearing before the Supreme Court on May 7. It is over to the court now.