In what could be termed as a relief to common people, the Brihanmumbai Municipal Corporation (BMC) is planning not to levy any tax under the new Local Body Tax (LBT) system. Instead, it will be collected from traders who sell goods.
According to the civic officials, citizens will not be charged any LBT for buying items from outside the city.
Instead, all the traders who have an annual import of `5,000 and more, or who have an annual turnover of `1.5 lakh, will be registered and LBT will be recovered from them. According to civic estimates, there are at least six to seven lakh traders still to be registered.
The BMC plans to abolish the octroi system and replace it with LBT by October. In the current octroi system, a person has to pay octroi on the bills of goods, which he has bought for personal consumption. The new LBT will relieve him from paying any further tax for bringing items from the neighbouring cities.
The BMC is also planning to register traders from the nearby cities — Thane, Bhayander, Navi Mumbai — where citizens usually prefer buying goods from, mostly furniture and electronics, due to the price difference.
“In case the traders don’t register and it is found that he has sold items to people in Mumbai without paying the LBT, there is a provision to fine the trader up to 10 times the tax.
The citizens will just have to show us the bill they get with the goods and they don’t have to pay anything,” said a civic official from the assessor and collector department.
Octroi is the highest source of revenue for the BMC, with an estimate of `7,200 crore for the year 2012-2013. LBT is
an account-based system where the traders and the businessmen would be responsible for the monthly payment of tax by the way of self-declaration. This tax will be paid directly to the BMC.