TAIT supports movement against LBT

The DQ Week had a meeting with certain Mumbai-based Traders Association of Information Technologists (TAIT) board members earlier this week. TAIT members discussed at length the perils of Local Bodies Tax with us and indicate that they are in full support of protest against LBT.

Last year, the Maharashtra government had announced introduction of Local Bodies Tax (LBT) in various cities, which will abolish octroi. Under LBT, the traders, manufacturers or owners of goods are required to pay up a lump sum amount within a specified period, designed to curb massive corrupt practices associated with octroi collection.

Starting 1st April 2013, LBT came into effect in municipalities of Mumbai, Thane, Navi Mumbai, Pune, Pimpri-Chinchwad, Kolhapur and Nagpur. Parag Shah, vice president, TAIT said, "The new LBT regime is going to impact each and every trader and not just IT channel partners. But, many still don't have much understanding about LBT."

According to LBT act Clause 2(1)(A), it applies to every trader, businessman, industrialist, transporter, hospitals & nursing homes, brokers, railways, petrol pump, restaurant, airlines, insurance, finance companies, association, CAs, engineers, event co-ordinators and more. And above all, it will lead to increase in cost of living of common men. Shah said, "There is a 500 page LBT book of rules and regulations, which can drive any businessman crazy and also next time you visit any shop keep your LBT number handy." Rushabh Shah, president, TAIT said, "LBT is just draconian."

The Key Points

1. All traders with turnover Rs 5,000 and above have to file returns every 40 days.that means even the local kirana shop and paan shop.

2. If raising money is the main aim, why not just increase the VAT %.

3. They have to keep records of LBT of buyers and sellers, which is unrealistic especially for any businessman who does 100 deals a day and keeping track of so many LBT numbers is insanity.

4. Suppose trader A buys goods from another trader B. Then if trader B hasn't paid LBT then trader A can be prosecuted.

5. Civic officials have demanded to keep records for the 2 years. They can conduct raid at any time at any place and can shut down the business.

6.There's a separate LBT layer and percentage for every item. Your local kirana shop houses more than 4000 items. Its not humanely possible to keep track .

7. It has to be filed online while not a bad thing but still thousands don't have proper internet access and basic computer knowledge.

8. Officers have right to stop vehicle and inspect it anywhere in city limits.