NMMC to rein in cess, LBT defaulters

The Navi Mumbai Municipal Corporation’s cess/local body tax (LBT) department has decided to take action against defaulters or those showing reluctance in paying the taxes. Officials have decided to recover the LBT or cess either from their bank accounts or by adding the moving goods of traders who are yet to pay the tax. 

Down with LBT: When LBT was announced, it met with stiff opposition from retailers and shop owners. In July, the NMMC recovered Rs 53.69 crore as LBT from traders. File Pic

There are 15 officers who are in charge of the various nodes in the satellite city of keeping a tab on defaulters. In addition, they have the authority to initiate action against defaulters.

The NMMC has so far collected about Rs 188 crore as cess or LBT since its introduction in Navi Mumbai since April. While the amount recovered in April comprised only cess, in May the recovery comprised cess as well as LBT. As per NMMC records, there are 23,000 traders in the Navi Mumbai and MIDC areas.

Unlike Mumbai, where traders are known to pay octroi, Navi Mumbai traders have been paying cess to the corporation for over a decade. The traders are now directly depositing the tax in the prescribed bank as per NMMC’s directions.

Sudhir Cheke, deputy municipal commissioner (cess), said the department was planning to take action against defaulters within a week’s time. He said, “Since the system was newly introduced, we allowed the dealers/traders to understand it well. Hence no action was taken initially. But now it has become essential to initiate action against defaulters.”

Revenue math
In July, the NMMC recovered Rs 53.69 crore as LBT from traders. Tax on food grains, which was 0.2 per cent before the implementation of LBT, was scrapped. While agricultural products were exempted from LBT, tax on items like wine and spirits was hiked from 4 per cent to 7 per cent. Similarly, tax levied on industrial items has gone up from 1 per cent to between 2.5 per cent and 3 per cent. While the NMMC collected Rs 420 crore from cess with a monthly average of Rs 35 crore during the last financial year, for this year (2013-14) it has set itself a revenue target of Rs 855 crore from cess/LBT.

Rs 188 cr Amount collected by NMMC in cess and LBT since April

Rs 420 cr Amount collected by NMMC in the form of the two taxes during last fiscal (2012-13)

Rs 855 cr NMMC’s target for the current fiscal (2013-14)

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