Chief minister Prithviraj Chavan has said that the implementation of Local Body Tax (LBT) will not affect the revenues of municipal corporations.
Speaking in the state Legislative Assembly on Tuesday, the chief minister tried to allay fears that LBT, which is set to replace octroi, will result in loss of revenue for civic bodies and will also start a new “inspector-raj”.
“The LBT rates have to be fixed only by the civic bodies. Since the implementation of LBT, there is no reduction in revenues of municipal corporations like Thane and Nashik. Elsewhere, the LBT revenue has come down, as people are not aware of how to pay taxes. Some people have also moved to court against LBT, thus resulting in delay in tax payments,” he said.
The issue was raised by Shiv Sena MLAs, who said that both the common people and traders were inconvenienced due to LBT and the state government is indifferent to the issue.
Mr Chavan said, “Fear about inspector raj is unfounded as it’s the common people who pay taxes and traders only collect them. Mumbai is the only city left in the country that has octroi. The rules need to be amended for Mumbai for the implementation of LBT. For this, several options are under consideration.”
However, he turned down the demand for one per cent surcharge on VAT in the implementation of LBT. “It cannot be a feasible option as it would require people from rural areas also to pay VAT. They have strongly opposed levying of surcharge on VAT,” he said.
Most civic corporations in the state, barring Mumbai, already have LBT in place of octroi. The introduction of LBT has been delayed in the city because traders and many political parties are opposed to it.
“The LBT will come into force only after the state legislature approves the law. It will not be implemented in Mumbai from October 1. Rules of other states are also being examined to see whether they can be implemented in Mumbai for LBT,” said the chief minister.