Govt imposes payment threshold limit for payment of LBT

New rules to be incorporated as amendmends

The government of Maharastra has come up with the final rules for the local body taxes(LBT) to be imposed for the first time in the Mumbai municipal corporation.

These rules are likely to be incorporated as amendments to existing Bombay Provincial Municipal Corporation ( Local Body Tax Rules), 2010 and called henceforth as Maharastra Municipal Corporations ( Local Body Tax Rules ). The LBT announced in the state budget was vehemently opposed by the traders , upon which the state government had set up an internal committee to review and revise the guidelines. These rules after amendment will be applicable for the entire state including Mumbai.

As per the final rules and unlike the draft proposal, the state government has imposed a threshold limit for payment of LBT by individuals along with dealers who are buying goods from other states and bringing into Maharashtra. While the limit for payment of LBT by dealers is Rs 1 lakh, for indivisuals including dealers who otherwise does not pay LBT, the limit for paying LBT is Rs 5 lakh. This purchase from one state for use in another is referred to as import of goods.

This means any indivisual who buys goods worth Rs 5 lakh from other states and brings it into Maharastra has to pay LBT.

While the dealers will have to pay LBT by 20^th of next month following the month to which the payment is due, the commissioner has been empowered to extend the due date for LBT payment by one month for the first month from the date of levy of the LBT.

Besides dealers have been given the liberty to maintain register of purchases and receipt of goods on transfer basis in computerised form but will have to submit the documents in hard copy if demanded. However if a dealer opts to pay LBT in lump sum , he is exempt from maintaining record of sale.

All dealers irrespective of whether they import good or not will have to file returns and importing dealers will have to furnish annual return within 90 days from the end of the year as against half yearly returns earlier.

In the refund rules, the commissioners has been empowered to allow set off the LBT paid by a dealers this month from the total LBT to be paid next month if the dealer is importing and exporting goods in the same month and provide sufficient proof for that.

Further while dealers will be require to preserve records for a period of five years, a dealer will not be required to preserve any assessment case record if he does not receive any assessment notice within one year from the last date of filing the returns.