Traders: LBT will promote corruption

May 08, 2013, 06:40 IST | Chetna Yerunkar and Apeksha Shrivastava

Protesting businessmen fear that the new system will not encourage transparency, and will force them to waste time on clerical work

The Local Body Tax (LBT) has been the talking point ever since it was implemented in most parts of Maharashtra from April 1. It will be imposed in Mumbai starting October 1. For over 15 days traders and shopkeepers have been protesting against the implementation of LBT in lieu of Octroi.

Signboards have been put up outside shops across the city in protest of the Local Body Tax (LBT), which will be implemented from October 1. Pic/Bipin Kokate

Traders have also called for an indefinite strike starting today and have said that they will give up only after the government withdraws LBT. Many shopkeepers across the city have already pulled their shutters down and markets wore a deserted look. More traders are expected to follow suit today.

As LBT is an umbrella tax, a lot of its rules and regulations will remain common across corporations. As part of the newly proposed tax, traders and shopkeepers will have to register with the Brihanmumbai Municipal Corporation (BMC) and will be subjected to frequent checks.

They also have to maintain paperwork and face police intervention from time to time. Traders with small businesses are worried that the new regulations will pile on additional paperwork, leaving them very little time to carry out their businesses.

“The concept of Octroi is operational only in Mahrashtra and nowhere else in the world. The process of filing LBT will be tiresome. Moreover the goods will become expensive, forcing people to look for alternatives, thus affecting our business,” said Mahender Chablani, a businessman from LT Marg.

Shopkeepers have also alleged that the government burdens them with taxes but doesn’t keep its promises. In 2008, the government had promised to cut down Octroi percentage, but failed to do so. “The LBT is ultimately going to affect the consumers. Also, it will not promote transparency, making it easy for people to follow corrupt practices,” said Divyesh Shah, a trader from Mumbai.

Additional Municipal Commissioner R Jalota said, “We will be implementing LBT by October 1. We will be in a better position to comment on the rules and regulations after the initial study.” 

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