'Charging 1% extra for new vehicles citing LBT is illegal'

Apr 03, 2013, 01:30 IST | Sukirt D Gumaste

Auto dealers in Pune have started charging extra for vehicles following the new tax since April 1; PMC officials threaten to file case if this continues

If you are intending to buy a new vehicle, beware. In the name of local body tax (LBT), auto dealers in the city are charging one per cent extra on the price of a new vehicle. They are also writing it by pen onto the bill. This is an illegal practice and no such extra cost is to be charged on the sale of any product. The Pune Municipal Corporation (PMC) officials have threatened to file a court case in the civil court against the defaulters who are charging extra.

Caught in print: Auto dealers are illegally charging 1% LBT on new vehicles and are specifying it roughly on the bill (in red box). PMC officials have threatened to file a court case against the concerned dealer as LBT cannot be charged from the customers while selling the product

“I took the quotation for Honda Dio on March 29 from a dealer. Then the amount was around Rs 53,000. however, when I came to book today (on Tuesday) they charged Rs 550 extra in the name of LBT,” said a customer. She also showed the bill (a copy of which is with MiD DAY). However, when contacted, the authorised person from Pashankar auto was not available for comment.

Since two days, boards were being put up at many two-wheeler showrooms across the city stating that the price of two-wheelers will be hiked by one per cent due to implementation of LBT from April 1.

Strict action
Head of LBT department Vilas Kanade said, “Any dealer cannot charge LBT while selling the product. We will take strict action against such practices. LBT is the replacement of Octroi and it should not be charged from the customers. Through LBT, only the mode of payment has changed.  There is no extra charge on any product. Actually, we have given rebate on many product-groups so price of various products should decrease ideally. Dealers have to pay LBT after a month. They cannot charge it in advance from the customers. We will file a case against defaulters if customers cope up and complain against the respective dealers. We are appealing to people to study LBT carefully and complain against such malpractices.” Daily, around 700 vehicles get registered in the city. “People can complain to the PMC’s LBT department and we will immediately take action,” Kanade added. 

Decrease in tax per cent under LBT
Earlier, there was a blanket 2 per cent charge on all products due to Octroi. However, under the LBT, products have been grouped together and put under different categories. This was not the case under Octroi. The percentage under LBT is different for each category but it is not more than 2 per cent. The PMC has reduced the percentage for categories like gold and LPG for domestic use, among others.

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