Chief Minister Prithviraj Chavan Monday ruled out any compromise on LBT as traders downed shutters across Mumbai, Pune, Nagpur, Aurangabad and Pimpri-Chinchwad.
Traders are demanding surcharge on Value Added Tax (VAT) instead of LBT. Some suggested that government wait for Goods and Services Tax (GST) to come into force. However, the government turned down both the recommendations.
Chavan said the decision on GST was pending and there was no guarantee that other states would agree to it.
"There are sections trying to evade LBT on grounds that cannot be justified," Chavan said. "The demand for additional surcharge on VAT will amount to people in rural areas having to pay for those in the cities."
The CM said VAT would amount to the state government collecting funds and distributing the money to municipal corporations. This, he said, would undermine the autonomous status of municipal corporations.
Chavan said, "Various organisations, without understanding facts, are dragging small traders into the protest. The traders are going to get their funds from consumers in any case; why are they reluctant to pay the tax?"
He said the government was open to amendments based on traders' suggestions and concerns.