LBT Rules relaxed

Maha Govt notifies amendments to LBT Rules, relaxes penalty provisions

* The transaction limit has been raised from Rs 1 lakh to Rs 3 lakh
* Major changes have been made to reduce interest and penalty provisions, much to the relief of traders

Staff Reporter
Even as the rumours about scrapping of Local Body Tax (LBT) were afloat in the city on Friday evening, Urban Development Department (UDD) of Maharashtra Government notified changes in LBT Rules. Issuance of the gazette notification ruled out any possibility of scrapping of LBT.
Notifying the Bombay Provincial Municipal Corporations (Local Body Tax) (Amendment) Rules, 2013, UDD stated that transaction limit was raised from Rs 1 lakh to Rs 3 lakh. The raised limit will be applicable in case of municipal corporation having population equal to or more than 20 lakhs as per Census-2011. Raising the transaction limit will help hawkers and small vendors as they will be out of the ambit of LBT.
Amendment has been effected to Rule 19 regarding ‘Dealers to maintain certain registers’. As per the amendment, every dealer shall have to maintain a register of purchases and receipt of goods on transfer basis in Form-D provided that the dealer may maintain the said register in computerised form and in such case, he shall be bound to produce relevant documents maintained under Maharashtra Value Added Tax when so demanded by the Commissioner for examination.
As per the notified amendments pertaining to Rule 29 sub-rule (2) clause (a), every registered dealer who has paid local body tax in lumpsum amount as per the provisions of Rule 27 shall be exempted from submission of any returns. Besides, the Government has extended date of filing of LBT return from 10th of every month to 20th of every month. LBT has been waived on 59 items to provide relief to consumers.
An amended Rule 45 asks Municipal Commissioner not to accord his approval to withholding the refund only, if he is of the opinion that on conclusion of such appeal, further proceedings or other proceedings, if it becomes necessary to recover the amount of refund in full or in part, then it may not be otherwise practicable or possible so to do in any reasonable period of time. In the same provision, it is stated that ‘no order withholding the refund shall be made after the expiry of ninety days from the date of service of the order giving rise to the said refund.’
If refund is withheld, Municipal Commissioner shall have to pay simple interest at the rate of 12 per cent, on the amount of refund ultimately determined to be due to the person as a result of the appeal of further proceedings or any other proceedings for the period from the date immediately following expiry of 90 days from the date of service of order.
Further changes have been effected in Rule 48 that details ‘imposition of penalty and interest in certain cases’. As per LBT Draft Rules, if a dealer/person has failed to apply for registration as required and has carried on business, he was required to pay a sum not exceeding 10 times of the amount of LBT payable for the period during which he carried on business without necessary registration. The notification issued on Friday has brought down this penalty to 5 times. Besides, the penalty of Rs 10,000 payable by a dealer/person in case of failure to comply with notice regarding proceedings in respect of assessment, re-assessment, production and inspection of accounts and documents and search of premises and revision; has been brought down to Rs 5,000.
Previously, failure to disclose any entry of goods on which LBT is leviable in the city for consumption, use, or sale; or claiming inaccurate deduction or refund, attracted penalty of a sum not exceeding five times the amount of LBT. The amended rules bring down penalty to two times the amount of LBT in such cases. Also, changes have been effected in sub-rule 3 of Rule 48. If a dealer/person does not pay LBT within set time-frame, he was required to pay LBT and simple interest of 2 per cent per month for the period of delay for first 12 months and 3 per cent per month thereafter. The notification issued on Friday deletes the words ‘for first 12 months’.
Production of false bill, cash memorandum, voucher, declaration certificate or any other document pertaining to goods imported in the city attracted twice the amount of LBT for first such commission and five times the amount of LBT for such commission furthermore. The notification has substituted the words ‘not exceeding twice the amount of’ with ‘equal to the amount of’, and replaces ‘five times’ with ‘two times.