Local Body Tax is a tax on entry of the goods into limits of city area for consumption, use or sale therein. It is well known by its abbreviation as L.B.T. It is substitute of octroi/cess levied by the local authorities like municipal corporations. The Local Body Tax finds its origin in entry 52 of List II attached to the seventh schedule of the constitution of India.
Entry 52 read as under:-
Taxes on the entry of goods into local area for consumption, use or sale therein. Under this entry the state legislature has exclusive power to make laws and collect taxes on entry of the goods in local areas. However Maharashtra Government has delegated these powers to the Local authorities such as Municipal Corporation and Municipal Councils. In Maharashtra presently L.B.T. is implemented in all the corporation except mumbai.
In Navi Mumbai Corporation jurisdiction there was no octroi. However, cess (i.e. tax on entry of the goods in Local area for consumption, use or sale therein) was first introduced by state Government w.e.f. 01.06.1996.Goverment of Maharashtra vide it's notification No.LBT -2013/C.R.22/VD-32(5)dt.,25th February 2013,has implemented Local Body Tax wef. 01.04.2013 in Navi Mumbai Municipal Corporation Area in place of cess. Provisions of Cess & L.B.T. more or less similar.
SCHEDULES OF THE GOODS
There are two schedules of the goods.i.e schedule "A" and schedule "B".Schedule "B" is Schedule for Tax Free Goods on which no Local Body Tax is leviable.Taxable goods are covered under schedule "A" and on these goods Local Body Tax is leviable at the rates mentioned against each entry of this schedule, on entry of these goods in NMMC area for consumption use or sale therein.
Related Section of the Maharashtra Municipal Corporation Act 1949 (Act LIX of 1949)
Section related of the Maharashtra Municipal Corporation Act 1949 (Act LIX of 1949) are Section 2, 99B, 99C, 99D, 127(2) (152A), 152B, 152D, 152E, 152F, 152G, 152I, 152J, 152K, 152L, 152M, 152N, 152O, 152P, 152Q, 152R, 152S, 152T & section 406.
Presently L.B.T. Rules are called The Maharashtra Municipal Corporations (Local Body Tax) Rules. Previously, these rules were called as "The Bombay Provincial Municipal Corporations (Local Body Tax) Rules 2010". Changes in name of the rules is carried vide notifications No. LBT-2013/CR-39/VD-32, dt.20th June 2013.
Major Features of L.B.T.
1. Limit of Turnover for Registration:
i) Importer - Value of all goods imported by dealer during the year is not less than Rs. 100000/-
ii) Others - Turnover of all their sales or purchases during such year is not less than Rs. 5,00,000/-
iii) Temporary Business -The person who carries out business in the city in any year on a temporary basis is also liable for temporary registration
2. Lumpsum Payment Scheme
i) The registered dealer whose turnover of all purchases during the year is less than rupees Rs. 1000000 can opt for the payment of a lumpsum amount of L.B.T.
ii) Builders & the contractors have options to make lumpsum payments of L.B.T.
3. Returns & Payment of Local Body Tax:
i) Every dealer has to pay due Local Body Tax on or before the 20th day of the month to which such payment relates.
ii) There is only one return i.e. annual return is provided under LBT Rules.Every registered dealer is required to file annual return in Form E-II within 90 days from the end of the financial year.
4. Exemption for Export:
i) Value of the goods used is Export outside the territory of India by a registered dealer is exempted from levy of LBT.