NMC seeks Rs 65 crore per month aid from State


Staff Reporter
Nagpur Municipal Corporation (NMC) has sought aid of Rs 65 crore per month from the State Government to maintain its financial stability, as octroi has been abolished already and Local Body Tax (LBT) also will cease to exist from August. A meeting in this regard is scheduled to be held in Mumbai on June 20.
Pravin Datke, Mayor, confirmed that he had sent a letter addressed to Devendra Fadnavis, Chief Minister, on Thursday. “We have sought the aid keeping in mind the highest revenue of NMC in the past five years. As the highest revenue from octroi was recorded in the year 2012-13, we have sought the aid at that rate,” he said.
It may be mentioned here that since introduction of LBT, NMC has been facing financial trouble. LBT had replaced octroi, the main source of revenue for NMC, but could not improve financial strength of the local body. Instead, NMC’s financial health deteriorated since introduction of LBT.
Against this backdrop, NMC has sought from the State Government an aid of Rs 65 crore per month, or Rs 776.89 crore per annum. In the year 2012-13, NMC had earned Rs 485.07 crore from octroi. Considering 17 per cent increase in recovery every year, NMC would have earned Rs 664.01 crore in 2014-15, and Rs 776.89 crore in 2015-16.
Mayor has sent a letter addressed to Chief Minister, Finance Minister, and Guardian Minister of the district. In the letter sent to the Government in this regard, Mayor has stated clearly that NMC’s finances will be in trouble if this aid is not made available. Already, NMC is finding it difficult to meet its committed expenditure on salary of employees, pension to retired employees, electricity expenses, repair and maintenance etc. NMC is struggling a lot to even pay salaries of its employees on time.
A meeting to discuss the demand for aid raised by municipal corporations, is scheduled in Mumbai on Saturday. Chief Minister Devendra Fadnavis and Finance Minister Sudhir Mungantiwar are expected to attend the meeting.
As is the case, municipal corporations reported loss in revenue since replacement of octroi by LBT. NMC reported loss of revenue by Rs 300 crore per annum since octroi was replaced by LBT. During the budget session of State Legislature, the State Government had announced to abolish LBT from August 1, as it expected Goods and Services Tax (GST) regime to come into effect soon. However, with GST implementation also getting delayed, the State Government is toying with the idea of funding municipal corporations for the period between abolition of LBT and introduction of GST. As per the estimates, such funding may increase burden on State by Rs 10,500 crore, if revenue from LBT in each municipal corporation is to be considered as the basis for quantum of funding. In that case, each municipal corporation may get only Rs 400 crore to Rs 500 crore per annum, till GST is introduced.

UDD clears amendments to
Amnesty Scheme for LBT Urban Development Department (UDD) of State Government has cleared the amendments to Amnesty Scheme for Local Body Tax (LBT), suggested by various municipal corporations including NMC.
As per the amendments, the scheme will be called Maharaashtra Municipal Corporations Local Body Tax Amnesty Amendment Scheme-2015. The amendments have been cleared in sub-clauses VII, VIII, IX of Clause 3. As per the amended Clause 3 (VII), there shall be 100 per cent assessment of traders under the Amnesty Scheme.
An amended Clause 3 (VIII) states that the last date for filing returns under Amnesty Scheme is July 31, 2015. Thereafter, all the pending tax arrears will be recovered along with interest and penalty as per the provision of Maharashtra Municipal Corporation Act and Maharashtra Municipal Corporations Local Body Tax (Amendment) Rules.
An amended Clause 3 (IX) provides that the assessment of returns filed under Amnesty Scheme-2015 shall be completed before March 31, 2016. Importantly, it adds that the date may be extended beyond March 31, 2016, on the request of municipal corporations.
State Government had announced Amnesty Scheme for waiver of interest and penalty from June 3, 2015, for recovery of LBT dues. 

(18-06-15)

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