M'rashtra to change BMC Act for LBT with relaxed draft

Penal provisions brought down, individuals exempt, no immediate search by officials of documents, power to enlarge exemption list

The Maharashtra Government proposes to amend  the Bombay Provincial Municipal Corporations (local body tax) rules 2012 with certain changes to the earlier proposal.

The amendment will be proposed  to be in the said Act in the July session of the Assembly.

The most important change as per the draft of the amendments is  that no operational or administrative officials of the ministry across the hierarchy will have any right to inspect books of the dealers upfront without showing any proper reason. It will require  specific written permission of the principal secretary of the concerned department - urban development ministry.

Explaining this draft amendments released recently, officials said, the fear of many traders that local body tax will usher in inspector raj is unfounded. It is self assessment based tax but if there is any discrepancy found like more value added tax paid for getting input tax credit but less purchases shown to pay less LBT, it will go to scrutiny, just like income tax. Upon this, investigations will start. Therefore there is no provision for immediate search and investigation.

Secondly, if a trader is registered under Maharastra Value added Tax Act 2002, it will suffice just to show that and get the LBT number. No documents other than relevant to prove VAT registration will be required to be furnished separately.

Thirdly, individuals taking goods from one municipal area to other will be exempt from paying LBT, unless they are taking for further sale of that commodity. Earlier, they used to pay tax at toll naka or checkpost of such municipal areas.

Fourthly, the LBT rules exempt 59 essential day to day goods. The individuals municipalities will be given power to enlarge the list as per their needs. Explaining this, officials said, Pune has brought LPG under the list. Similarly, if a specific municipal corporation feels that  price of certain commodity  imported from out of state needs to be brought down, they can enlarge the list.

For refund of LBT, the commissioner will have to dispose the appeal to withhold the refund within 90 days from the date of  service of the order of refund. If the refund is withheld beyond 90 days, the commissioner will be liable to pay simple interest at the rate of 12 per cent on the amount of refund ultimately determined as a result of disposal of the appeal  from the date of service of the order to the date of refund.

The draft proposes to drastically bring down the penal rates for violations of dealers under LBT rules. The violations include failure of the dealer to furnish bills, invoices, cash memo, failure to register, failure to cooperate with proceedings of investigation, failure to disclose entry of goods upon which LBT is to be levied, etc. The date of payment of LBT, related fine, penalty which as per earlier rules was to be paid withing 10 th of the month next to the month in which such liability arises. Now it will be 20th of the next month.