Traders' stir severely hits tax inflow in Nagpur

In an unexpected fall-out of the ongoing traders' strike, the Nagpur Municipal Corporation (NMC) has reported a steep drop in cash flow by way of Local Body Tax to just around Rs.2 crore since April 1, when it (LBT) was implemented, an official said.

Last year, when octroi was being collected (before it was replaced by LBT this fiscal onwards), the April revenue figure of octroi collection was Rs.40 crore, according to NMC Assistant Municipal Commissioner (LBT) Mahesh Dhamecha.

However, the LBT collection for April has been just around Rs.2 crore, but the NMC administration is not alarmed.

"This is because LBT is an account-based, transparent system and the traders have time till May 20 to pay up. After a couple of months, it will pick up and generate even higher revenues than octroi," Dhamecha told IANS.

In 2012-2013, NMC collected Rs.4.85 billion by way of octroi and this year for 11 months (2013-2014), Dhamecha hopes the LBT collection will be in excess of Rs.5 billion.

Dhamecha said that on an average, the daily collection of the erstwhile octroi was Rs.15 million (per day).

However, after the first couple of months when things settle down, LBT collections are likely to exceed the erstwhile octroi collections every month, he said.

LBT, which replaced the traditional octroi in the various municipalities in the state, is an account-based cess collection for every raw material used or imported into the city limits by all businesses, traders and manufacturers.

While LBT has already been implemented in most parts of Maharashtra from April 1, it is due to be implemented in Mumbai from Oct 1 this year.

Federation of Associations of Maharashtra (FAM) and other affiliated associations' have been on indefinite strike in different parts of the state since April 22 against the new tax.

Last Monday, traders in Mumbai and other major cities have launched an indefinite strike against LBT.

FAM leaders have been knocking the doors of various political parties, including Nationalist Congress Party, Shiv Sena, Bharatiya Janata Party and Republican Party of India to build pressure on the state government and roll back LBT.