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Traders, civic body oppose Local Body Tax, favour surcharge on VAT
June, 13th 2014

Traders and civic officials on Thursday vehemently opposed Local Body Tax (LBT) and favoured surcharge on value added tax (VAT) with a facility for direct transfer into the accounts of the municipal corporation. This, they said, would enable the civic body to get tax revenue on daily basis.

This decision was taken at the joint meeting of city traders, industrialists and office-bearers of the Nashik Municipal Corporation (NMC) on Thursday. Following instructions from chief minister Prithviraj Chavan, city mayor Yatin Wagh had convened a meeting of traders and industrialists to discuss the issues related to the LBT and an alternative to the present tax system.

"During discussions, it was clear that there should not be LBT or octroi. But while introducing the new tax system to replace LBT, the state must ensure that it would be simple and convenient to public, traders and industrialists," Wagh said.

He added, "Moreover, the revenue generated through the new tax system should be deposited immediately into the accounts of the municipal corporation. The suggestions by the traders and industrialists to levy surcharge on VAT and its online transfer to the municipal corporation would be conveyed to the chief minister. The report of the meeting will be submitted to the chief minister in a day or two."

Traders and industrialists voiced their opposition to both octroi and LBT and sought surcharge on VAT with provision of direct or online transfer of tax into the accounts of the municipal corporation.

Prafulla Sancheti, executive president of Nashik City Traders' Federation, said, "We have already expressed our protest against octroi, recovery of LBT through sales tax department and any other new tax in place of the LBT. We are in favour of surcharge on VAT, which should be directly deposited into the accounts of the municipal corporation."

Vikram Sarda, past president of MCCIA, said that efforts are needed to decide how the two per cent surcharge on VAT would be directly transferred to the municipal corporation. The state government will have to make legal provisions for the purpose, he said.

The meeting was attended by the office-bearers of the Nashik City Traders' Federation, Maharashtra Chamber of Commerce, Industry & Agriculture, Nashik Industries & Manufacturers' Association, Ambad Industries & Manufacturers Association, Indian Institute of Architects, Nashik Transporters' Association, Laghu Udyog Bharati, Nashik District Industries & Exporters' Association, Nashik Wholesale Cloth Merchants' Association, Nashik Cement Dealers Association, All India Federation of Cloth Retailers' Association, Nashik Institute of Personnel Managament, Nashik Dhannya Kirana Ghauk Vyapari Sangh, Cidco traders' Association and others.

The president of the Ambad Industries & Manufacturers' Association, Vivek Patil, pointed out that octroi is a rigid tax as the industries do not get their consignments in time, while former president of NIMA Dhananjay Bele said that the surcharge on VAT should be into effect only till Goods and Services Tax is introduced.

The CM had called a meeting of the mayors from all 26 municipal corporations across the state on Tuesday. During the meeting with CM, some options -two per cent surcharge on VAT, recovery of the LBT through the sales tax department or any other new tax in place of LBT-were discussed.

"We are of the view that the autonomy of the municipal corporation pertaining to its own income source should not be affected while introducing the new tax system in place of the LBT. The transfer of revenue should not get delayed in case the government takes a decision to collect the tax through sales tax or other department," said Wagh.

Pradeep Peshkar, president of BJP Udyog Aghadi, said that the state government should give three months' grant to the municipal corporation and deduct the amount from the revenue collected through surcharge on VAT.

Leader of the opposition in the NMC Sudhkar Badgujar said that the government should take a uniform decision for the state as against the contradiction in the introduction of LBT.

City traders and industrialists on Thursday strongly opposed the present LBT and octroi and unanimously sought surcharge in VAT with provision of its direct transfer to the municipal corporation


"We are against LBT and octroi. We don't want a new tax now, but the municipal corporation can get revenue through surcharge in VAT, which will be directly paid into accounts of the civic body. We are of the view that the autonomy of the municipal corporation pertaining to its own income source should not be affected. We also want abolition of the escort as levied by the municipal corporation"

Hemant Rathi, past president, Maharashtra Chamber of Commerce Industry & Agriculture

"Introduce surcharge in VAT instead of LBT, octroi or any other tax. We are of the view that income of the municipal corporation also should not be affected, but the tax system should be in a way that it would be favourable to industries, traders and people"

Manish Kothari, president, Nashik Industries & Manufacturers' Association

"Apart from LBT and octroi, the resolution pertaining to cancellation of the professional tax should be sent to the state government"

Ramesh Pawar, president, Nashik District Industries & Exporters' Association

"The recovery system for LBT was wrong and it should be abolished. We are in favour of the surcharge in VAT instead of LBT"

Nilesh Chavan, Nashik president, Indian Institute of Architects

"The term of the Congress-NCP led state government has almost ended and finally they want to take everyone into confidence and find solution. We don't want LBT and octroi, but the source of income of the municipal corporation should not be affected while deciding new tax system in place of the LBT"

Shashikant Jadhav, leader of the house in civic body

"The surcharge in VAT should be introduced in place of present LBT. The VAT should be removed on all items and additional tax hike be made on petrol and diesel"

Digvijay Kapadia, president, All India Federation of Cloth Retailers Association

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