LBT brings an additional Rs 17 crore to NMMC's kitty

The Navi Mumbai Municipal Corporation’s (NMMC) revenue has got a major boost due to the much-hyped and controversial Local Body Tax (LBT). The collections, since its implementation is much more in comparison to cess that dealers would pay to the corporation till the last financial year. Despite the corporation’s Cess/LBT department not having taken any strict action against the defaulting traders, the corporation’s revenue has risen drastically.

Local Body Tax
Up in arms: In May, traders protested against the implementation of Local Body Tax (LBT) across the state. File Pic

Going by the figures, the Local Body Tax (LBT) collections stood at Rs 42.82 crore in May, while in June, the amount rose to Rs 49.69 crore approximately. If one compares the figures with cess collected last year, then, in May 2012 - Rs 31.42 crore was collected, while in June 2012 – Rs 33.07 crore was collected. Sources from NMMC said that no new registration numbers were required to be taken by the traders and the cess number itself was converted into the LBT number.

While agricultural products have been exempted under this new tax, the tax on other items like wine and spirit has now risen to 7 per cent from 4 per cent. Tax on industrial items that stood at 1 per cent last year has been increased to 2.5-3 per cent. In the last financial year, NMMC was known to collect Rs 420 crore as revenue from cess with a monthly average of approximately Rs 35 crore.

Unlike Mumbai -- where traders are known to pay Octroi -- in Navi Mumbai, traders have been paying cess to the corporation for over a decade. They are now directly depositing the tax amount in listed banks as per directions given by NMMC. Sudhir Cheke, deputy municipal commissioner (DMC), cess, said, “60 per cent of LBT revenue comes from industries. There are 22,000 dealers who are registered with us and we have not started taking any strict action against those who have not been paying yet. Paying the tax is a must for those importing goods in the NMMC area for sale, consumption and use.” He also added that the LBT revenue could help a lot in the infrastructural development of the city.  

Good newS for NMMC
The long-standing dispute between the Small Scale Entrepreneur Association (SSEA) and the NMMC has finally ended. The civic body has now been given the right to recover property tax and cess from the entrepreneurs. Earlier, they had refused to pay stating that they did not come under the NMMC's jurisdiction but under the MIDC industrial area.

The SSEA had filed a writ petition in 2001 in the Bombay High Court stating that the NMMC had no right to collect property tax and cess from them. However, the High Court is known to have disposed the writ petition deciding that their area is a part of Municipal Corporation and hence it is the right of the Municipal Corporation to recover property tax and cess.

Sudhir Cheke, NMMC deputy municipal commissioner, Cess, said, "The dealers of the MIDC area were being misguided and we have all documents to prove that they come under the NMMC's jurisdiction making it necessary for us to collect taxes. The dues are long pending from the dealers' end. If they do not pay, we may be forced to take action."

Rise in revenue
April     Cess: Rs 29.03 cr
May      Cess: Rs 31.42 cr
June    Cess: Rs 33.07 cr
April     LBT: Rs 29.74 cr
May      LBT: Rs 42.82 cr
June    LBT: Rs 49.69 cr

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