LBT abolished for traders below Rs 50 cr turnover in Maharashtra

* Govt to compensate loss of municipal corporations by way of providing them revenue earned through stamp duty collection from urban areas
* Amnesty Scheme extended up to August 15
Staff Reporter
Maharashtra Government, on Friday evening, announced that the Local Body Tax (LBT) would be abolished from August 1, 2015, for the traders having annual turnover below Rs 50 crore. The move will provide relief to 99.85 per cent of the traders enrolled for LBT in Maharashtra, Chief Minister Devendra Fadnavis said while making a statement before the State Legislature.
The announcement comes as a great relief to traders across Maharashtra and Nagpur, the Second Capital. For, though the deadline of July 31 was drawing closer the municipal corporations had not received any final communication regarding abolition of the much-discussed tax from August 1. Chief Minister informed the State Legislative Assembly on Friday that LBT would be abolished in the limits of 25 municipal corporations across the State from Saturday, August 1. With this, the BJP-led Government has fulfilled its important pre-poll promise. The Government had made an announcement to abolish LBT, during the Budget Session of State Legislature.
Fadnavis said that there were a total of 8,09,553 traders in the areas under 25 municipal corporations in the State who had registered for LBT. The abolition of the tax for traders with less than Rs 50 crore annual turnover will benefit as many as 8,08,391 of these enrolled traders. Thus, of a total number of traders registered under LBT, 99.85 per cent would get benefit of abolition. Only 0.15 per cent of the registered traders, the number comes to 1162, will have to pay LBT as their annual turnover will be Rs 50 crore or more.
The abolition of LBT had triggered widespread demand from municipal corporations, which had demanded Government funding to make good the loss in revenue. Addressing this aspect, Chief Minister informed the Assembly that these 25 municipal corporations would have earned Rs 7,648.82 crore in the financial year 2015-16 considering 8 per cent rise per year on the highest revenue earnings of these local bodies in the past five years.
The Government has decided to divert revenue from stamp duty collection from urban areas, as compensation to municipal corporations to make good their loss of revenue due to abolition of LBT. This comes as a great relief to citizens as LBT is not being replaced with any new tax.
As a matter of extending immediate help to these local bodies, the Government has moved a supplementary demand of Rs 2,048.44 crore for the first five months of the financial year 2015-16. The financial assistance will be distributed to municipal corporations after setting up an independent compensation fund, and not from the State’s Consolidated Fund. Municipal corporations would be compensated adequately for the loss, Fadnavis added.
As far as Amnesty Scheme is concerned, Chief Minister made it clear that the scheme would be extended till August 15. Previously, July 31 was the last date for availing of the benefits of Amnesty Scheme. During the period of extension, returns for the period April-July 2015 also may be filed.
Nagpur Municipal Corporation (NMC) has sought compensation from the Government at the rate of Rs 65 crore per month. 

(31-07-15)

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