According to CAIT, traders have lost business of over Rs75,000 crore during the past two weeks of their strike. The government should come forward for an open debate on imposition of the LBT, the traders' body has demanded
Traders' body Confederation of All India Traders (CAIT) has called for an open debate on the merits and demerits of local body tax (LBT) that is being implemented in Maharashtra even as most shops across the state have remained closed today as well.
CAIT claimed that loss of business during the two-week long protest from traders and shopkeepers is estimated to be over Rs75,000 crore. To avoid more losses, the traders' body has called for an open debate on the merits and demerits of imposition of such a tax.
“The estimated business loss was over Rs75,000 crore causing a revenue loss of about Rs9,000 crore to the state government due to the strike,” the confederation said.
Wholesale and retail traders from Mumbai, Thane and Nagpur have been on an indefinite strike against LBT, stating the move will hurt their businesses badly.
Maharashtra is trying to replace the traditional octroi system with the new LBT. LBT is an account-based cess collection for every raw material used or imported into the city’s limits by all businesses, traders and manufacturers. In the newly introduced local body tax, a lump sum amount has to be paid by traders or manufacturers or owner of goods within the specified period.
CAIT said LBT suffers with various legal infirmities, ambiguities, confusions, disparities and anomalies. It will lead to double taxation on the same product, which is against the settled law of any taxation system.
“The basic principles of proposed Goods & Services Tax (GST) for which the Maharashtra government has already agreed, have been flouted even when the GST is not yet implemented. This amply shows that state government is inclined to play with the taxation system,” said BC Bhartia, national president of CAIT.
CAIT national secretary general Praveen Khandelwal questioned the jurisdiction of local bodies to enforce, collect and govern any accounting based tax, which has interpretation of law at each step. The municipal corporations and other civic bodies are not mandated to act as tax authorities. “Accounting based taxation system and interpretation of the taxation law, not being the core competence of municipal authorities, will result into greater harassment and victimization of traders,” he said.
According to Khandelwal under the proposed system, traders will have to keep record of all such entries and will have to file a return with the local self-government of the concerned city. This will lead to extra paper work whereas the traders are already subject to comply with large number of paper formalities under different acts, laws, rules and regulations, he claimed.
In Mumbai, which is the only city that charges octroi at 4%, LBT will come into effect from October, while other cities in the state have already gone the LBT way.