• Sep
  • 04
  • 2013

Local Body Tax in Maharashtra – Highlights

Adv. Kishor Lulla

Advocate Kishor Lulla1. Octroi v/s LBT:

At present octroi is the main source of revenue of Municipal Corporations in Maharashtra. This is the exclusive State where octroi is levied. In fact it is not levy but it is forcibly collection at the check post. It is the spot of harassment for the traders. The presence of any provision of Law is always absent at the check post. I am doubtful whether any of the officers or traders have read the provisions of octroi! There may be hardly any octroi practitioner or consultant who can legally fight against the malpractices in octroi department. Due to heavy corruption on one side and leakage in octroi on the other side, there was a demand from a class of traders to abolish the octroi. This can save the wastage of diesel and also time consumed at the check posts. Cess is levied in place of octroi in New Mumbai since 01 June 1996. LBT is levied now in most of the Corporations. In the forthcoming G.S.T. also, this Act may not be subsumed.

2. Constitutional Power:

Clause (3) of article 246 of constitution empowers the State legislature to make laws with respect of subject matter enumerated in list II of seventh schedule. Entry 52 of list II of Seven Schedule of the constitution provides for taxes on the entry of goods into a local area for use consumption or sale therein.

3. Birth of LBT:

The powers to levy LBT are derived from section 127(2) (aaa) of the Bombay Provincial Municipal Corporation Act, 1949. In exercise of the powers conferred by sub section (1) of Section 152T and of all other powers enabling it in that behalf, the Government of Maharashtra, made rules vide Noti. No. LBT-0209/CR-65/09/UD-34, dt. 25th March 2010 namely “Bombay Provincial Municipal Corporations (local body tax) Rules, 2010” (Now The Maharashtra Municipal Corporation (Local body Tax) Rules, 2010) and levied LBT in all Corporations of Maharashtra from 21.08.2012. The name of the Act is changed as The Maharashtra Municipal Corporations Act (Act No. LIX of 1949). The concerned sections are sec. 152B to sec. 152 O except 152C in chapter XI–A and sec 152 P to sec 152 T in chapter XI-B. The Act is governed by Urban Development Department. It extends to the areas of Municipal Corporation. Hence if any trader is carrying on business in more than one Municipal Corporations, he has to obtain registration certificate in each such Corporation separately. Without going into the details of litigation by traders, as a student of Law let us study some highlights of LBT. Details can be referred in statute books, web sites of required Corporation.  This paper cannot be taken as legal base.

4. Definition of LBT (S. 2 [31A]) w.e.f 31.08.2009:

LBT is another name of octroi and cess. Octroi is collected at check posts. In LBT check posts are supposed to be removed. It is a tax which can be collected by Corporations on the basis of books of accounts like VAT. Any goods which are brought into the Corporation area (import) from outside Corporation area for use, consumption or sale are liable for LBT. Mere physical entry of goods into local area is not sufficient to attract octroi/cess/LBT, as held by Hon’ble Supreme Court in case of M/s Mafatlal industries Ltd vs. Nadiad Nagar palika & Another decided on 1st March,2000 (AIR2000, SC1223, 2000(72) ECC472). List II of the Seventh Schedule of the Constitution pertains to the State list and at serial no. 52, taxes on entry of goods into a local area for consumption,  use or sale therein has been incorporated. As per charging sec. 152P, LBT is levied on the entry on the taxable goods. It means goods brought other than for this purposes like storage and packing will not be liable. But intangible or incorporeal goods will be covered. It is a tax on purchase and not on the sale of goods. It is a self assessment account based tax. If goods are purchased inside Corporation area from unregistered dealer under LBT Act and who has imported the goods  then also LBT is payable. If any software is downloaded within city limit on payment of a price from a dealer outside the city limit, then it will be treated as a purchases liable for LBT.

It is to be noted that sec. 152P did not provides any specific statutory provisions of payment of LBT by a dealer who is liable to pay under the Act. In fact in every taxing statue there is a provision of payment of tax by specific person/dealer. For e.g. sec. 152A (2) of this Act, sec. 4 of MVAT Act, sec. 4(3) of Entry Tax Act 2002 and sec. 3(2) of Entry Tax on Motor Vehicle Act, 1987. Thus it can be seen that in every taxing statue burden to pay tax is cast upon a particular person/dealer who is liable to pay under the Act, but there is no such specific provisions in LBT Act or Rules made there under.

[The terms import & export as well as purchase price are not defined under the Act.]

5. Goods (S. 2 [25]):

Goods” includes animals. LBT is leviable on all movable goods.

6. Importer (S. 2[28A])

“Importer” means a person who brings or causes to be brought any goods into the limits of city from any place outside the area of the city for use, consumption or sale therein.

7. Dealer (S. 2[16A]) :

“Dealer” means any person who weather for commission, remuneration or otherwise imports, buys or sells any goods in the city for the purpose of business or in connection with or incidental to his business and includes factor, broker, commission agent, auctioneer, Central & State Government, Society, Club and A.O.P. As under MVAT Act Port Trusts, Railway etc are also covered to the extent of disposal of goods etc. Non-resident dealers like petrol, diesel and oil companies and their dealers, traders doing temporary business like sale, exhibitions and occasional transactions are also covered.  Agriculturist is exempted.

According to me Trusts and Hospitals will not be liable for LBT as they are not covered under the Act.

Exception in the definition of dealer.

 Any individuals who imports goods for his exclusive consumption or use and a department of State & Central Government not engaged in business shall not be a dealer.

Even in sec. 152B (1)- incidence of cess (LBT) the words are “every dealer” —- shall be liable to pay tax. This clearly means any student, employee, housewife who are not dealers and do not carry on any business will not be liable to pay LBT.

8. Business (S. 2 [5A]):            

         i.   “Business” includes any trade, commerce, profession, consumption or manufacturer ——carried on with a motive to gain or profit and whether or not any gain or profit accrues——- and whether or not there is a volume, frequency, continuity or regularity in such trade ——. Professionals like Chartered Accountants, Advocates, Architects, Doctors, Tax Consultants and Service Providers are also covered to the extent of import of goods for consumption or use in profession. This will bring taxability on goods like motor vehicle, CCTV, computer etc if purchased from URD in city area or imported from outside LBT area. Registration is also compulsory on the basis of exceeding prescribed limit for registration during the year of notification or preceding year. The dealer is restricted to carry on business, if he is liable for registration, unless he possesses a valid certificate of registration (R.9). The activities of raising of manmade forests or rearing of seedlings or plants shall be deemed to be a business.

       ii.   Distinction between business and profession :

The constitution of India while ensuring under Article 19(1)(g) to all citizens the right to practice any trade, business or profession has maintained a clear distinction between carrying on a trade or business as against practicing a profession. The reason underlying the distinction is that unlike in a trade or business, a profession is practiced without any underlying profit motive. What a practicing professional renders to his client is his services essentially based on his qualification, personal skill and intellectual capacity. All the learned professions have certain common characteristic like statutory recognition of the profession and adoption by the members a self contained code of conduct with statutory checks and boundaries to ensure professional integrity and character along with competence of the members of the profession so as to inspire confidence of the people in the profession. The Supreme Court also has in several judgements maintained the above cited distinction between a trade and business on one hand and the practice of profession on the other hand. The legality of user of premises is governed by the local laws applicable in various states in respect of Shops and Establishments Act, 1948.

     iii.   Case law on firm of lawyers :

In V. Sasidharan V/s Peter and Karunakar (1984) 65 FJR 374 (SC), the question for decision before the Supreme Court was whether the office of a lawyer or of a firm of lawyers is or is not a commercial establishment within the meaning of the Kerala Shops and Commercial Establishments Act (34 of 1960). The SC held that it does not require any strong argument to justify the conclusion that the office of a lawyer or a firm of lawyers is not a “shop” within the meaning of section 2(15).”

The Supreme Court has also, in several judgments reiterated this fundamental distinction. In National union of Commercial Employees V/s Industrial Tribunal (1962) 22 FJR 25, the Court held that a firm of solicitors was not an “industry” within the meaning of section 2(j) of the Industrial Disputes Act and that the services rendered by the firm were only in the individual capacity of the partners and very much dependent on their professional equipment knowledge and efficiency.

iv. Case law on private dispensary :

In yet another case of Dr. Devendra M. Surbi V/s. State of Gujarat (AIR 1969 SC 63 6T), the Supreme Court had occasion to examine the definition of “Commercial Establishment” in section 2(4) of the Bombay Shops and Establishments Act, 1948 and construing the word “Profession” appearing in association with the words “Business and Trade” in the said sub section, held that a private dispensary of a medical practitioner did not come within the definition of “Commercial Establishment”.

v. Case law on Chartered Accountant :

One can try by filing writ petition, as not liable as a professional, relying in following two cases.  Bombay High Court in A.F. Ferguson & Co vs. State of Maharashtra W.P. No. 1232 of 1995 on 5-5-2006 had categorically decided that the office of Chartered Accountant was not a “business and commercial establishment”. The Court struck down unconstitutional sections of the Bombay Shops and & Establishment Act that included CAs within the definition of commercial establishment. Similar findings were recorded by the Bombay High Court in the case of B. G. Sabne in W.P. No. 1256 of 1992 on 12-9-2006. Chartered Accountants were thus declared by the jurisdictional High Court as “learned professionals” on the same footing as the three traditional professions – church, medicine and law.

9. Registration (R.3)(Sec. 152B- incidence of LBT)

   i.   w.e.f 20 June 2013 – The limits for registration shall be –

a)      in the case of a dealer, who is an importer and the value of all the goods imported by him during the year is not less than Rs. 1 lakh.

b)     In any other case, including the case where a dealer has not become liable to pay LBT under clause (a), and the turnover of all his sales or purchases during such year, is not less than Rs. 5 lakh.

The liability for registration accrues even if the limits of turnover are crossed in the immediately preceding year.

ii.  Temporary Registration

If a dealer is carrying on a business in the city on a temporary basis, then he shall be liable for temporary registration under the Act & Rules, irrespective of turnover of Sales & Purchases. He has to apply 15 days prior to commencement of such business. VAT registered dealers are deemed to be registered dealers under LBT [R.9(3)].  A dealer having additional place of business in different Corporation limits has to apply individually to respective Corporation Authority.

10. Rate of Tax (S. 152 and R. 23) 

Schedule A is for taxable goods (sec. 152Q) and schedule B is for tax free goods. Each Corporation may have their own schedules prescribing rate of tax of various commodities.  The rates of LBT are decided by State Government which are usually recommended by the commissioner. As per note mentioned under group IV of schedule A – “Notwithstanding any rate as notified above any concession/rebate in the levy of octroi given by the Government of Maharashtra by order/notifications shall be continued subject to term & conditions mentioned in such respective Government of Maharashtra’s order.”

 11. Purchase and Sale Outside Corporation Area:

If the goods imported are not brought in Corporation area and directly sent to godown/ office/ branch and sold directly from outside Corporation limit then LBT is not payable. Proper recording in books of accounts, inward – outward register, delivery challans and dispatch proofs are required. Similarly, if the goods pass through the city limits during the course of movement from one place to another, will not be liable for LBT in the city from which goods are passed. The sale must occasion the movement of goods outside the city limits. If someone from outside the city limits himself presents physically or sends a vehicle and buys goods in the city at the counter of the dealer, and leaves, then this is not sale outside the city limits. Obviously because sale has not occasioned the movement of goods outside the city limits.

Where the buyers purchases within (the city) and transfers goods later outside – it was held that it is sale within (the city) only and not outside.

(Pimpri Chinchwad Mum. Corp. vs  Tata Engg & Loco Co. Ltd. [AIR-1992-SC 645] dt. 26.07.2000)

12. Value of the Article S. 2(70C):

“value of the article”, in relation to the goods imported into the city, where “octroi” or “cess” is charged on such goods on ad valorem basic, shall mean the value of the article as mentioned in the original invoice, and include the shipping dues, insurance, custom duties, excise duties, counter veiling duty, sales tax (if any), Value Added Tax (VAT), transport charges, vendor freight charges, carrier charges and all other incidental charges.

13. Presumption and Burden of proof (R.20):

            i.   If a registered dealer in the area of the City has purchased by goods specified in Schedule A, from any other registered dealer in the area of the City, then for the purpose of proving that he is not liable to pay LBT in respect of such goods, he may furnish to the Commissioner, as and when required by him, a certificate issued by the selling dealer as provided in R.21. If the Commissioner is satisfied, after making such enquiry as he deems necessary, that the certificate furnished is true and correct, he may, at the time of, or at any time before the assessment of LBT payable by the dealer under these rules, make an order to that effect and thereupon it shall be deemed, for the purpose of these rules, that the first mentioned registered dealer is not liable to pay LBT in respect of the aforesaid goods.

ii.      Until the contrary is proved, where any goods specified in Schedule A are imported by a dealer or person, into the limits of the City, it shall be presumed that the goods have been imported into the City for consumption, use or sale therein or are for trans-shipment thereof, to any other place outside the area of the City, as the case may be.

14. Invoice – Certificate & Particulars of bill (R. 21& 22) (Sec. 152G)

i) Where a dealer who holds any goods in the area of the City, sells the goods to any other dealer in the area of the City, then the selling dealer shall issue to the purchasing dealer a bill, invoice or cash memorandum containing a certificate. 

ii) Every dealer who is required to issue the bill, invoice or cash memorandum in respect of the goods sold or supplied by him, shall specify in the bill or cash memorandum issued by him, the full name and style of business, the address of his place of business and number of his certificate of registration and the particulars of the goods sold and –

a.        Where the bill, invoice or cash memorandum is issued by a registered dealer, then the bill, invoice or cash memorandum shall contain a certificate as follows, namely -

      “I/we hereby certify that my/our registration certificate under these rules is in force on the date on which the sale of the goods specified in this bill/invoice/cash memorandum, is made by me/us and that the transaction of sale covered by this bill/invoice/cash memorandum, has been effected by me/us in the course of my/our business”.

b.       Where the sell price is not less than Rs. 500, the dealer shall also enter in the bill, invoice or cash memorandum the full name and style of business of the buyer (if any), and his address and the number of any certificate of registration held by him.

As per sec. 152G if a registered dealer sales goods to another registered dealer or to any other person exceeding Rs. 10, invoice has to be issued.

15. Liability of LBT in certain cases (S. 152 D) :

Where any goods on which LBT is leviable, are imported into the limit of the City by any person (not being a registered dealer) from any place outside of the City area and sold to a registered dealer, there shall be levied and collected LBT on such goods at the rate fixed by the Corporation, under the rules, from time to time, and such registered dealer shall be liable to pay the LBT so levied,

Provided that no LBT on the same goods shall be levied if such purchasing dealer proves to the satisfaction of the Commissioner that the LBT has been paid earlier on the said goods to the Corporation.

This provision is like purchase tax on URD purchases under BST Act.

There is no bar in collecting LBT from customer. But it cannot be more than the liability to be paid on purchase value. It is also practically difficult.

As per sec. 152F if any person liable to pay LBT, he cannot carry on business unless registered.

16. Additional Stamp Duty (Sec. 149A) Notification dt. 31.08.2009

The stamp duty on the instruments of sale etc on immovable property in LBT city area, be increased by a surcharge at 1% from the Notified date.

17. Exemption in certain cases (R. 28)–

i) No LBT shall be levied on the goods imported into the city by State or Central Government, on production of a certificate from an officer empowered by the Government concerned in this behalf, certifying that the goods so imported belong to the Government and are imported for public purpose and are not used or intended to be used for the purpose for earning profit.

ii) No LBT shall be levied on the goods imported into the limits of the City on behalf of, or an account of State or Central Government, on production of a certificate from an officer empowered by the Government concerned in his behalf, within a period of six months from the  date of importation, certifying that the goods so imported belong to the Government and are imported for public purpose and are not used or intended to be used for the purpose of earning profit.

iii) If any goods held by a dealer or a person in the City are moved outside the City for carrying out the processes enumerated in the Explanation to this rule, and are re-imported without effecting any change in condition or appearance, as also the ownership of the goods, the value of the goods moves out, shall be allowed to be deducted from the total value of processed goods reimported and LBT shall be leviable only on the value added i.e. Processing charges, transfer charges, etc.

        Provided that, the goods are reimported within a period of six months from the date of export outside the City and the dealer furnishes the information of such export in the returns for the relevant period.

iv) If any dealer in the city imports any goods from any place outside the city for carrying out any of the processes enumerated in the explanation under this rule, on job work basis and proves to the satisfaction on the Commissioner that  the goods processed have been exported within a period of six months from their importation, to the same person outside the city and there had been no change in the ownership and in the form of the goods at the time of export, no LBT shall be levied subject to the following conditions namely :-

a. That dealer shows the value of such goods in the return of the relevant period.

b. The dealer pays security deposit, as a guarantee, as may be, determined by the Commissioner in this behalf. However, a dealer importing the goods for processing on regular basis, may make a deposit as standing deposit as may be fixed by the Commissioner from time to time.

       Explanation – For this purpose processing shall include –

  • Grinding, dyeing, bleaching, painting, printing, finishing, stentering,  embroidering, doubling, twisting, metalizing and electroplating;
  • Building and mounting of bodies over chassis of vehicles of all kinds.
  • Other processes as may be approved by the Commissioner, from time to time.

            The decision of the Commissioner in this respect shall be final.

As per decision by Apex Court in the case of Mafatlal Industries Ltd v/s Nadiad Nagar Palika & Another dt. 01.03.2000(AIR 2000 SC 1223, 2000(72) ECC 472), cutting of textile cloth into pieces from 100 meter long cloth & export as per customers requirement does not change the identity of the cloth. In other words cloth remains as a cloth, only size is changed.

 v) When any goods held in the City are sold and exported outside the City are received back due to rejection of goods by the purchaser, no LBT shall be levied on such goods, provided that the goods are received back in the City within a period of six months from the date of their export and the dealer proves to the satisfaction to the Commissioner that the sale of such goods was disclosed in the return of the relevant period.

vi)  The registered dealer who is exporting the goods outside the territory of India shall be exempt from the levy of the LBT in respect of the value of the goods used for the purpose of such export.

vii) It is to be noted that wherever there are railway stations – the station area (i.e. mal dhakka and the area owned and under the railway authorities administration) is not within the municipal limits, because the railway stations are under the Central Government administration and not under the municipal administration limits. The tax is on goods brought into the city limits for consumption use or sale therein. Hence if goods are only stored or are lying for further dispatch outside the city, are not taxable. Hence, if goods arrived by rail and dispatched out of such station area directly outside the city limits, then those are treated as not brought within the city limits and ultimately not taxable under LBT.

18. Refund of LBT in case of Export (R. 32) :

i) Where any goods which are imported in the City on which LBT has been paid, are exported outside the City by the same person by way of sale or otherwise, then ninety percent of such amount of LBT so paid, shall be refunded to that person on satisfaction of following conditions :-

a)   The details of goods imported are given in the relevant return, showing that goods are imported for export, and the return is furnished.

b)  LBT on such import is paid with relevant return.

c)   Goods are exported within period of six months from date of importation.

d)  Relevant Return claiming of refund after export is furnished.

e)   The Person when asked by Commissioner, shall prove that goods imported have been exported without making change in the goods, (i.e. in the same form)

Provided that, the Commissioner may allow any dealer who is importing and exporting the goods listed in Schedule A, on his satisfaction, to pay only 10% of the LBT chargeable after obtaining from such dealer a declaration that the goods are to be exported within a specified period.

w.e.f 20 June 2013

provided further that any dealer who is importing and exporting the goods in the same calendar months and provide sufficient proofs for that, the Commissioner may allow him to set-off in the next calendar month.

Rule 32(2)(a) vide Notification dt. 06.08.2012                       

 ii)   (a) Where the dealer or person has made the payment of tax, after adjustment of refund    without  prior permission of the Commissioner, the cases shall be taken up for regular assessment.

            (b)  On such assessment, if it is found that, the dealer or a person who has claimed the refund,   in excess of what he is eligible for, then on such differential amount, a penalty at five times of such differential amount found due, shall be levied

         (c)  Where the dealer or person is eligible for refund and make such claim the Commissioner shall assess the dealer on priority basis within one month from receipt of such application and decide the claim. If the Commissioner fails to decide the claim of refund within two months from the due date of filling of such application, then the dealer or person shall be eligible for interest at 6% of such refund which becomes due, till the date of payment.

19. Return (R. 29) w.e.f 20 June 2013:

1)  Every registered dealer shall subject to the provision of the rule furnish an annual return in form EII within 90 days from the end of the year to which such return relates …..

2)  Every registered dealer who is not an importer shall be required to file nil return annually. 

w.e.f. 25th March 2010

3)  Commissioner may specify different periods and dates for different dealers etc.

4)  Revised return can be filed before the expiry of one month next, following the last date prescribed for the filing the original return.

5)  A dealer doing temporary business shall furnish return in Form EI within specified dates.

20. Payment (R.40)

1)  (a) Every registered dealer, unregistered dealer or person other than a dealer liable to pay LBT or penalty or interest or any sum forfeited or the amount of fine shall pay to the Commissioner, due & payable according to the return on or before the 20th day of the month next following the month to which such payment relates. There is no bar for collection of LBT. It is to be charged on purchase value.

w.e.f 20 June 2013-

2)  Notwithstanding anything contained in clauses(a) of sub-rule (1) but subject to the provisions of this rule, every registered dealer who is required to furnish annual return in from E-II for the year, under the provisions of sub-rule(1) of Rule 29 shall pay the amount of LBT payable by him each month of the year, on or before the 20th day of next month following the month to which such payment relates :

Provided that the Commissioner may extend due date for the payment of LBT by one month for  the first month from which the date of levy of LBT has been notified.

21. Lump Sum Payment (R. 27) as amended vide Notification dt. 06.08.2012:

 i.  A composition scheme of lump sum payment of LBT is provided for dealers having purchases up to Rs. 10 lakhs per year. It starts with nil tax upto turnover of purchases of Rs. 1 lack and ends with Rs. 20 thousand for turnover between 9 to 10 lakhs. Permission by Commissioner is required by applying in Form R. Payment is to be made within 15 days from the receipt of the order.

     Rule 27(4)

 ii. Any builder or contractor who undertakes the work of construction within the Municipal   limits shall get himself registered with the Corporation under LBT and shall have the option of either paying LBT on the value of the goods imported into the limits of the City for construction or use, or alternatively making the lump sum payment of LBT in accordance with the following norms-

   a. For construction up to 4 floors (where the building is without lift)- Rs. 100 per sq. meter

b. For construction up to 7 floors(where the building is with lift) – Rs. 150 per sq. meter

 c. For construction high rise building (above 7 floors) – Rs. 200 per sq. meter

Normally it is always on built up area.

The contractor who opts for lump sum payment of tax may make the payment of LBT, in advance to the extent of 50% of such amount due, on applying for grant of commencement certificate for such construction.

Rule 27(5)

iii. Any dealer or person undertaking any work within the area of Municipal Corporation shall have the option of either paying LBT on the value of goods imported into the limits of the City for undertaking  such  work or alternatively, paying the said tax on lump sum basis at 0.25% of their total amount of contract value.

22. Record (R. 19) (Sec. 152I)

      LBT rules provide to maintain only one register in form D for purchases and receipt of goods on transfer basis. It is further provided that the dealer may maintain the said register in computerized

form and in such case he shall be bound to produce relevant documents maintained under the Maharashtra Value Added Tax Act, 2002 when so demanded by the Commissioner for examination.But it is recommended to maintain detailed purchase and sale register by adding separate columns in it, to prove our claims for set off or refund and export or transfer (R. 28&32). Also one should preserve all delivery challans, dispatch proofs, stock register and goods transfer register.

23. Inspection of goods in transit: (Rule 26) (deleted as per noti. Dt. 20 June 2013)

      In order to prevent evasion of LBT, the Commissioner may require to stop and keep stationary any vehicle including goods vehicle, and examine the contents of the vehicle and inspect all records related to goods carried in such vehicle, to give name and address of the driver, person in charge, owner of the vehicle and consigner & consignee of the goods, and may require such person concerned to pay the LBT on such goods. The transporter shall be deemed to be owner of goods unless proved to the contrary.

      Vehicle is defined in sec. 2(71) as vehicle includes a carriage, a cart, van, truck, hand-cart, bicycle, tricycle, motor car, and every wheeled conveyance which is used or is capable of being used on a street. Commissioner is also empowered with the powers of search & seizure.

24. Assessment (R.33)(Sec. 152S)

      The amount of Local Body Tax due from a registered dealer liable to pay shall be assessed separately for each period. The Commissioner may proceed to asses within 5 years from the end of the year. Rule 33 (14) – Assessment case records shall be preserved for 5 years next following the period to which the assessment relates or for three years, next following the completion of the proceedings under the Act, relating to the said period, whichever is later. There seems to be no time limit for completion of assessment. But as per various High Courts pronouncements assessment has to be passed within a reasonable time.

      w.e.f. 20 June 2013 –

      Provided that no assessment case record shall be preserved by the dealer who shall not receive the assessment notice under sub-rule (1) within one year from the last date of filing the return under rule 29.

       There are also provisions of reassessment u/r. 34, rectification u/r. 35 and notice for production of  documents u/r. 47.  Sec. 152J is for powers of enforcement.

25. Refund (R.44):

Excess amount paid can be refunded only after order in form M is passed by Commissioner. No interest on refund is provided.

26. Withholding of refund (R.45):

   i.   Where an order giving rise to a refund is the subject matter of appeal or where any other proceedings under these rules is pending and the authority competent to grant such refund is of the opinion that the grant of the refund is likely to adversely affect the revenue , such authority may, with the previous approval of the Commissioner, withhold the refund till such time as the Commissioner may determine,

“Provided that, the Commissioner shall not accord his approval to withholding the refund only, if he is of the opinion that on the conclusion of such appeal, further proceedings or other proceedings, if it becomes necessary to recover the amount of refund in full or in part, then it may not be otherwise practicable or possible so to do in any reasonable period of time:

  Provided further that, no order withholding the refund shall be made after the expiry of ninety days from the date of service of the order giving rise to the said refund.

ii. Where a refund is withheld under sub- rule (1), the Commissioner shall pay simple interest @ 12% on the amount of refund ultimately determined to be due to the person as a result of the appeal or further proceeding, or any other proceeding for the period from the date immediately following the expiry of ninety days from the date of service of the order referred to in sub-section (1) to the date of refund.

27. Appearance (R. 54):

Proceedings may be attended by:

         i.   Relative or person regularly employed by the dealer or person.

       ii.   Legal Practitioner, Chartered Accountant or Cost Accountant.

  iii.      A Local Body tax practitioner who possesses the qualifications specified by the Commissioner by general order.

An authorization is to be given by the person or the dealer in Form Q by the person on whose behalf such proceeding is attended.  No court fee stamp is prescribed.

28. Interest (R. 48[3]) w.e.f. 20.06.2013

If a dealer liable to pay LBT does not pay the LBT on or before the due date, then he shall be liable to pay simple interest at 2% per month in addition to amount of LBT.

If any LBT is found due as a result of order of assessment passed under this Act, then such dealer is liable to pay simple interest, a sum equal to 2% of such LBT for each month from the first date after assessment period till the date of such order of assessment.

Provided that such interest shall not exceed the amount of LBT due on which such interest is charged.

Explanation – A part of a month shall be counted as one complete month.

Note: As per constitution levy of interest & penalty in substantive. But it seems that Legislatures has not given power to Government for this levy. This issue is challengeable (reference can be made in the case of India Carbon under CST Act)

29. Penalty [Rule 48(1) & (2) Rule 49] (Sec. 152L)

Some of the penalties are as under -

         i.            If a selling dealer fails to issue to the purchasing dealer, a bill, invoice or a cash memo, a penalty of a sum equal to the amount of LBT may be levied.

       ii.            In any Proceedings under the Act or LBT rules, if a dealer-

(a)   has failed to apply for registration, a penalty of sum not exceeding five times of the amount of the LBT payable may be levied.

(b)  has failed to comply with any notice under the Rules, a penalty of sum not exceeding                     Rs.5, 000/- may be levied.

(c)   has failed to disclosed any entry of goods or claimed in accurate deduction, refund or failed to disclose true material fact, a penalty of a sum not exceeding two times of the amount of LBT found payable may be levied.

iii.     A penalty for production of false bill, cash memo, declaration or document, shall be equal to the amount of LBT due for first occasion and not exceeding two times the amount of LBT due for second or any subsequent occassion.

iv.   A penalty for furnishing false declaration or certificate shall be not exceeding two times the amount of LBT due.

v.      A penalty for late filing of return shall be not exceeding Rs. 5,000/- for each return.

  vi.  A penalty for excess collection of LBT shall be Rs. 2000/- or double the amount of excess collection  of LBT, whichever is less, in addition to forfeiture of the LBT collected in excess.

 Sec. 152N is for compounding of offences which is not more than ten times and not less than      four   times of penalty.

Note: For levy of interest the words used are “shall”. As against this for levy of penalty the words used are “may”.  

30. Procedural Provisions:

There are provisions of returns, goods returns, payment of tax, interest, penalty, assessment, reassessment, rectification, appeal, enforcement, D.D.Q. Special mode of recovery, provisional attachment, power to withhold refund; notice for production of documents as they are available under MVAT Act.

31. Tariff Value and Fair Market Price (R. 24 & 25):

   i.      The Commissioner has got power to fix tariff value of the goods, where he is satisfied that the importers are showing lesser value of the goods. The Commissioner shall display such tariff on the notice board of the Corporation and thereafter such rate will be applicable for collection of LBT.

ii. The Commissioner can determine the FMV of goods by giving reasonable opportunity of being heard in cases of :

a. Purchase / Sale Price are less in case of the Transaction between related person.

b. Purchase Price is not ascertainable.

c. Goods have not been obtained by sale or Purchase.

  32. Appeals (S. 406 & R. 36 to 38):

  If the demand notice is raised by LBT officer, the appeal shall lie to Deputy Com and if demand notice is raised by Deputy Com then appeal shall lie to the Commissioner. Full payment of disputed tax has to be made for entertainment of appeal. The time limit for filling appeal is 15 days. Appeal can be preferred against demand notice. It cannot be done against any order. Like issuance of R.C. or cancellation of R.C. etc. Powers to be exercised by the appellate authority are not specified. Also there are no powers for remission of interest. There is no provision for condonation of delay as well as revision of appeal order. There is no provision of appeal before Tribunal. Appeal in High Court is not affordable to all.

33. Anomalies & Suggestions:

   i.   The implementation of LBT should be given to VAT authorities. All the provisions of MVAT should be made applicable to LBT. By this, assessment by two authorities will be avoided.

 ii.   For proper implementation of LBT, there should be a district level committee of trading Organizations, Tax Associations and consumer bodies under the chairmanship of Commissioner who should discuss to solve the common problems of traders, once in a month.

iii. The Rules are not properly worded. There is wide scope for discretion and interpretation.  Rates of LBT should be same in all Corporations. A State level committee should be formed to study the anomalies in the LBT Rules.

iv. One full day workshop of officers & traders to be arranged by the Commissioner for smooth implementation of LBT. Majority of the litigations have started due to lack of knowledge and misinterpretation.

 v.   Details of Act, Rule, Schedule A (taxable goods), Schedule B (Tax free goods), Circulars, Internal Guidelines & decisions in appeal to be displayed on website. (Sec.152Q)

vi. The scheduled goods needs a serious and practical relook; otherwise there will be huge number of applications for D.D.Q.’s. There should be time limit for disposal of D.D.Q’s. (R.31)

vii. This tax should also be subsumed in G.S.T.

viii. FAQ should be published by Corporation by inviting questions from traders, practitioners & consumers.

ix. Check Posts must be removed.

 x.   A proper check on U.R.D. dealers should be kept instead of harassing the registered dealers.

xi. No LBT should be levied on the professionals like doctors, engineers, architects, advocates, chartered accountants, tax consultants etc. as basically they cannot be called dealers doing business.

xii. As per sec. 152G if a registered dealer sales goods to another registered dealer or to any other person exceeding Rs. 10, invoice has to be issued. This price limit should be enhanced upto Rs. 500/-

xiii. The administrative system should work in such a way that it should not be a golden opportunityto tax evaders due to removal of check post.

xiv. There is exception under the definition of the dealer which is under – 

Any individuals who imports goods for his exclusive consumption or use and a department of State & Central Government not engaged in business shall not be a dealer.

Above exception is not usually published and also not implemented by the Corporation. The individuals like students, house wives, Government employees and employees in private firms are not liable to pay LBT if they import any goods of any amount, since they are neither dealers nor doing any business.

Similarly if any person or dealer imports any building material for his residence or if he imports any vehicle for his personal use, he is not liable to pay LBT. (Sec.2 [16A])

xv. Clear provisions for right to claim set-off in the returns should be made. Set off should be allowed on proportionate or ratio method if exports are made out of mixed local and imported purchases. [R. 32(2)(a)]

xvi. As per R.28 (5) the deduction for rejection of goods is allowed in case of export. But the same type of deduction is not available if the rejection is made out of imports.

xvii. List of processing to be increased so as to cover various activities. Commissioner has power to include the required processes from time to time. Meaning of “no change in any condition or appearance of the goods” should be cleared.(R.28)

xviii. The rates, quantum of interest & penalties are exorbitant, which gives wide scope for corruption. (R.48(3), R.48(1&2), R.49, Sec. 152L)

xix. There will be litigations on ‘Value of the Articles’, ‘Purchase Price’, ‘fair market value’, and ‘tariff value’, ‘discounts’ and ‘debit/credit notes’, due to lack of clarity, wide discretion and untrained staff. (Sec. 2(70C), R. 24 & 25)

xx. Procedure of refund is too clumsy. Hardly any chances of getting refunds as under MVAT Act. Interest @ 1% p.m. has to be given on refund.(R.32)

xxi. Why permission of Commissioner is required to pay 10% differential tax who is exporter, on the “satisfaction of the Commissioner?” What is the meaning of “satisfaction of the Commissioner?” As per my information, no Commissioner has given such permission till today.(R.32) Similarly after insertion of 2nd proviso to R. 32 w.e.f. 20.06.2013, if the dealer is eligible for full set-off, the benefit of 1st proviso of obtaining permission of 10% will not be any use. 

xxii. The return in Form E- II is complicated. It has to be simplified. The time limit for revised return is before the expiry of one month from the date prescribed for original return. But it should be on the lines of MVAT Rules. (R. 29)

xxiii. Instead of monthly payment for everybody, it should be on the basis of MVAT Rules. (R. 40)

xiv. There seems to be provision like purchase tax under BST Act if purchases are from URD. But this is not correct. Purchases from URD are basically linked with import by URD. So it is difficult to prove for the buyer (R.D.) that registered dealer who is his vendor has not imported the goods. If a goldsmith purchases old ornaments from a customer and obtains a letter from the customer that he has not imported the ornaments, the goldsmith will not be liable to pay LBT. (S.152D)

xv. A circular should be issued mentioning therein that no LBT is leviable simply because office and billing is from inside LBT area but goods have never entered in LBT area. Those are purchased and sold out of LBT area.

xvi. Filing appeal in High Court after making full payment is not affordable. There must be provision of appeal before Tribunal. Also provision of part payment before appeal should be made.(Sec. 406 & R.36 to 38)

xvii. There are various provisions which are incorporated directly under the rules instead of providing under the Act. These provisions can be challenged as ultra vires. 

In conclusion, we can say, there is great scope of harassment on one side and evasion on other side and increase in unwarranted litigation. The government itself is an enemy of its own in this regard, had it not been like that, this ‘paper war’ would have satisfactorily ended long back. It would have come to ‘conclusion’ and would have stopped ‘confusing’ the people! There should have been the trend to ‘ease’ the traders, and not to ‘tease’ the traders.

Isues of Local Body Tax for Builders and Developers

  i.            A lot of problems may arise in case of builders and contractors as provisions and composition scheme are not clear. Detail working has to be made before selecting any method. For example – A builder is constructing a building of seven floor and above, having sanctioned 25000 sq. ft, is liable to pay Rs. 4,65,000/- @ 18.60/- per sq. ft as per R. 27(4).

It is presumed that

  1. Cost of construction is Rs. 2500/- per sq. ft.
  2. 50% material is imported.
  3. Average rate of LBT is 4%.
  4. So LBT works out at Rs. 12, 50000/- as per regular method.

Hence it seems that lump sum payment method is beneficial. One more benefit is that, once lump sum payment is made, no need to produce details of purchases.

ii.            Similarly, many Corporations make it compulsory to pay this amount at the time of sanction of plan. But it should be kept in mind that adoption of this method is the choice of the builder.

iii.            Once payment is made as per lump sum method, then it is beneficial to purchases goods from outside LBT area as it may cheaper to the extent of LBT. Since most of the builders may out lump sum payment scheme and therefore will try to purchase goods from outside LBT area, the business of suppliers of inside corporation area may suffer.

 iv.            As per R. 27(4) the contractor who opts for lump sum payment of tax may make the payment of LBT in advance to the extent of 50% of such amount of due, on applying for grant of commencement certificate for such construction. But there is no provision about the time for balance payment. Similarly if any building is partly constructed on the date of implementation of LBT, there is no provision about the method of payment for non constructed area. According to me architect certificate should be accepted. 

v.   There seems to be no provision for refund if the quantum of the work reduced finally or if the work of construction is cancelled after the payment of 50% lump sum amount.

vi.  Before paying LBT, a builder has to decide whether he will be constructing on his own or he will be sub contracting the work, again entirely or partly. Also he has to decide on whom the responsibility to pay the LBT will be fixed i.e. on him or on sub contractor. This planning has to be made to avoid double taxation as there is no specific provision of exemption for this purpose.

vii.  For one project of the builder, five times LBT is charged or levied directly or indirectly. First 1% surcharge at the time of purchase of plot as per Sec. 149A.   Secondly on the basis of sq. mtrs on construction area if he opts for composition as per R. 27(4).               

Thirdly his sub contractor or any dealer or person undertaking any work will pay  0.25% of total amount of contract value if he opts for composition as per R. 27(5).

Fourthly contractor’s suppliers or vendors will be including LBT if goods are purchased within the LBT area.  Lastly again on the sale of shops or flats as per Sec. 149(A).    This entire multiple taxation is exorbitant for which special provision of set-off is required.

viii.  One can hold another view that LBT is leviable only once either as per R. 27(4) or R. 27(5) because proviso to sec. 152D says that “no LBT on the same goods shall be levied if such purchasing dealer proves to the satisfaction of the Commissioner that the LBT has been paid earlier on the said goods to the Corporation.”

ix.            No procedure for application and time of payment is prescribed for lump sum payment of 0.025% as per R. 27(5).

x.            The builder is not liable to pay LBT if construction scheme is outside the city area, since the goods never enter into the city area.

xi.            If registered agreement to sale with payment of stamp duty is already completed before the implementation of LBT, then so surcharge of 1% is payable as per sec. 149A, if only deed of conveyance is pending. The matter is at present under consideration with the Urban Development.

xii.            As per “Exception” in the definition of dealer, any individuals who imports goods for his exclusive consumption or use and a department of State & Central Government not engaged in business shall not be a dealer.

A contractor can accept construction work for the above on labour charges basis. In other words, material can be purchased in the contractee’s name and avoid paying LBT.

(Author is a Advocate from Sangli and may be reached by mail at lullakishor@gmail.com)

(Article was First Published on 17.04.2013 and republished on 04.09.2013 with amendments)


145 Responses to “Local Body Tax in Maharashtra – Highlights”

  1. Vikas says:

    If i import Dinning,center tables, etc. from jaipur to mumbai. The work on it is hand art work. Kindly if anybody can help to know whether octrio,vat, sales tax will be apply. if yes at what rate. Further, whether it will cover under handicraft defination of Maharshtra sales tax / octrio .

  2. M Singh says:

    I have a Pvt Ltd export company registered at Nasik. I export salt from Gandhidham (Gujarat). In my business activity no goods enter or leaves Nasik Municipal limits. I feel, my company does not fall under the definition of a dealer. Hence LBT is not applicable to us. Kindly comment.

  3. Nayana says:

    Dear Sir,

    We are dealers for imported goods.
    We sell these in all over India.
    We dont do any value addition, we simply sale the goods by adding profit margin.

    In this case is LBT is applicable?
    These are engineering goods, how much is percentage?

    How can I know the percentage of LBT? or the LBT is exempted in particular area.

    Thanks & Regards,

  4. vivek khunteta says:

    tell me weather LBT is applied for vat examptem also or not specially turmeric (haldi)and methi

  5. Swapnil says:

    Sir,

    One of my clients is purchasing raw material from outside Maharashtra, processing the same in Maharashtra and export the Finished Goods to foreign countries. Whether LBT will be applicable??

  6. Pushpak Tantia says:

    Sir,
    1. As per you explanation (16A), you say LBT is not applicable for goods imported in city for personal use.

    But corporation say as per 16A, individual importing goods for personal use is only exempted from definition of Dealer and not payment of LBT (in rule it is no where written Personal or Business use) while saying so the refer to sec 40 of LBT rule: Every registered dealer, unregistered dealer or person other than a dealer (pls note person), liable to pay LBT or penalty or interest….

  7. Pushpak Tantia says:

    Sir,
    1. As per you explanation (16A), you say LBT is not applicable for goods imported in city for personal use.

    But corporation say as per 16A, individual importing goods for personal use is only exempted from definition of Dealer and not payment of LBT (in rule it is no where written Personal or Business use) while saying so the refer to sec 40 of LBT rule: Every registered dealer, unregistered dealer or person other than a dealer (pls note person), liable to pay LBT or penalty or interest….

    Kindly explain your view on Sec 40.

  8. asn says:

    ON REJECTED MATERIAL RECEIVED TO US (PVT.LTD.CO),
    IS LIABLE TO LBT

  9. Nagesh says:

    Dear Sir,

    If i buy a vehical from dealer at Thane city & pay LBT to TMC where as register vehical at kalyan RTO as i am staying in kalyan, does LBT paid to TMC covers Kalyan and Dombivili city.

  10. Milind says:

    Sir,
    1. As per you explanation (16A), you say LBT is not applicable for goods imported in city for personal use.

    But corporation say as per 16A, individual importing goods for personal use is only exempted from definition of Dealer and not payment of LBT (in rule it is no where written Personal or Business use) while saying so the refer to sec 40 of LBT rule: Every registered dealer, unregistered dealer or person other than a dealer (pls note person), liable to pay LBT or penalty or interest….

    Kindly explain your view on Sec 40.

  11. Lokesh says:

    Is LBT liable on goods which are purchased out of Maharashtra?

  12. sandeep says:

    Dear Sir,

    I have register dealer in municipal area limit. i have purchase material out of maharashtra & sale by municipal area limit & direct sale outside area of municipal area limit. so lbt charge for only this purchase to sale in municipal area limit or hole purchase including sale of directly outside area of municipal area limit?

  13. lalit says:

    Mr. Kishore,

    We have a warehouse in Bhiwandi from where material is sent to customers across Maharashtra.
    Major business comes from Mumbai, Pune and Thane. Do we need to pay LBT for sales made to these locations ?
    If yes, does it make sense to have a warehouse at Mumbai or major volume cities ?
    In Mumbai, how many municipal corporations are there from LBT perspective ?

  14. NITIN SOMANI says:

    sir,
    please guide me that can lbt.officer red on shop directly & they had power to seal the shop?

  15. CA PAVAN R. AGRAWAL DHULE says:

    Sir,

    One of my client is Doctor, he wants to purchase a machinery from outside India through Indian Dealer, whether he is liable to pay the LBT on this transaction

  16. CA PAVAN R. AGRAWAL DHULE says:

    Sir,
    One of my client is professional doctor and he wants to purchase machinery from outside India through Indian Dealer, whether he is liable to pay LBT

  17. rajesh says:

    Sir
    I built a own representational house in the lbt aria I have purchases a material in LBT aria as well as not LBT aria
    Sir can I lible to pay LBT?

  18. Niraj Gangwal says:

    We are a leading Industrial Valve Manufacturers and have one Unit at Rabale under NMMC Jurisdiction.

    Since 1998-1999 the NMMC Authorities have charged CESS/LBT on materials which is brought from OUT of NMMC Range to Rabale Factory for Machining and Labour purpose as well as for Testing and Inspection of Valves. They have Charged LBT/CESS on both Revenue as well as Expenses as per the cost of materials declared in JOB WORK Challans 57/F4 of Central Excsise.

    We have been assessed from 1998 till Mar-2011

    Please Let us know whether LBT/CESS is payable on Labour Cgs and Testing done by us.

  19. srinivas vss says:

    OCTROI is applicable if we supply Software or Hardware to the below location/company:

    Ordnance Factory
    Jawaharnagar
    Bhandara
    PIN – 441906
    Maharashtra, India.

  20. Ashish Thakur says:

    Dear Sir,

    Is LBT applicable on renting a cab in local corporations limits.
    The Travel agent is in Pune and transporting staff in PCMC limits than LBT is applicable

  21. Deepak.Patil says:

    Dear Sir,
    I Am Facing Problems Filling Yearly Returns For LBT.
    My Business Falls In Pimpri Chinchwad Municipal Corp .
    They Uploaded E-Returns Format ,And Then Removed From The Website.
    When I Visited The PCMC Office , Instead Of Looking The Documents ,The Officer Asked Me About Balance Sheet ,Profit And Loss Accounts And Income Tax receipt.
    Please Guide Me .
    Regards ,
    Deepak.Patil.
    9763683387.

  22. Ashish says:

    Sir, I want to know what is the LBT for un-manufactured Tobacco in Mira Bhayandar ? Also for Pune and other states of Maharashtra

  23. thanawala says:

    purchase from oms on what price lbt charged

  24. Builders in Jalgaon says:

    LBT is just en extra burden. first the government must make proper utilisation of taxes and then ask people to be loyal and pay proper tax. the taxes paid by people are just for ministers and babus care. we pay taxes so that they can enjoy.

  25. Kishor Lulla says:

    manoj shah – job worker will pay on full amount of import of yarn. Rate of tax has to be checked in schedule. But the rule is nor drafted properly, different view is quite possible.

  26. Kishor Lulla says:

    Rajiv Sinha – you are correct.

  27. Kishor Lulla says:

    paresh – software is goods. Hence liable but subject to notification in which list is given under MVAT Act if same words are copied in LBT Schedule which are under MVAT Schedule.

  28. Kishor Lulla says:

    Deepak – not liable. Need not register as far as goods are not your own goods.

  29. Kishor Lulla says:

    hesham sainani – not applicable.

  30. Kishor Lulla says:

    Pradeep – need not register and need not pay. Better to change address.

  31. Kishor Lulla says:

    V – you have to obtain LBT registration number and pay the tax.

  32. Kishor Lulla says:

    Rakesh – Search in schedule of Nagpur corp.

  33. Kishor Lulla says:

    Prasad – No.

  34. Kishor Lulla says:

    Asha Muluk – Isues of Local Body Tax for Builders and Developers

    i. A lot of problems may arise in case of builders and contractors as provisions and composition scheme are not clear. Detail working has to be made before selecting any method. For example – A builder is constructing a building of seven floor and above, having sanctioned 25000 sq. ft, is liable to pay Rs. 4,65,000/- @ 18.60/- per sq. ft as per R. 27(4).

    It is presumed that

    Cost of construction is Rs. 2500/- per sq. ft.
    50% material is imported.
    Average rate of LBT is 4%.
    So LBT works out at Rs. 12, 50000/- as per regular method.

    Hence it seems that lump sum payment method is beneficial. One more benefit is that, once lump sum payment is made, no need to produce details of purchases.

    ii. Similarly, many Corporations make it compulsory to pay this amount at the time of sanction of plan. But it should be kept in mind that adoption of this method is the choice of the builder.

    iii. Once payment is made as per lump sum method, then it is beneficial to purchases goods from outside LBT area as it may cheaper to the extent of LBT. Since most of the builders may out lump sum payment scheme and therefore will try to purchase goods from outside LBT area, the business of suppliers of inside corporation area may suffer.

    iv. As per R. 27(4) the contractor who opts for lump sum payment of tax may make the payment of LBT in advance to the extent of 50% of such amount of due, on applying for grant of commencement certificate for such construction. But there is no provision about the time for balance payment. Similarly if any building is partly constructed on the date of implementation of LBT, there is no provision about the method of payment for non constructed area. According to me architect certificate should be accepted.

    v. There seems to be no provision for refund if the quantum of the work reduced finally or if the work of construction is cancelled after the payment of 50% lump sum amount.

    vi. Before paying LBT, a builder has to decide whether he will be constructing on his own or he will be sub contracting the work, again entirely or partly. Also he has to decide on whom the responsibility to pay the LBT will be fixed i.e. on him or on sub contractor. This planning has to be made to avoid double taxation as there is no specific provision of exemption for this purpose.

    vii. For one project of the builder, five times LBT is charged or levied directly or indirectly. First 1% surcharge at the time of purchase of plot as per Sec. 149A. Secondly on the basis of sq. mtrs on construction area if he opts for composition as per R. 27(4).

    Thirdly his sub contractor or any dealer or person undertaking any work will pay 0.25% of total amount of contract value if he opts for composition as per R. 27(5).

    Fourthly contractor’s suppliers or vendors will be including LBT if goods are purchased within the LBT area. Lastly again on the sale of shops or flats as per Sec. 149(A). This entire multiple taxation is exorbitant for which special provision of set-off is required.

    viii. One can hold another view that LBT is leviable only once either as per R. 27(4) or R. 27(5) because proviso to sec. 152D says that “no LBT on the same goods shall be levied if such purchasing dealer proves to the satisfaction of the Commissioner that the LBT has been paid earlier on the said goods to the Corporation.”

    ix. No procedure for application and time of payment is prescribed for lump sum payment of 0.025% as per R. 27(5).

    x. The builder is not liable to pay LBT if construction scheme is outside the city area, since the goods never enter into the city area.

    xi. If registered agreement to sale with payment of stamp duty is already completed before the implementation of LBT, then so surcharge of 1% is payable as per sec. 149A, if only deed of conveyance is pending. The matter is at present under consideration with the Urban Development.

    xii. As per “Exception” in the definition of dealer, any individuals who imports goods for his exclusive consumption or use and a department of State & Central Government not engaged in business shall not be a dealer.

    A contractor can accept construction work for the above on labour charges basis. In other words, material can be purchased in the contractee’s name and avoid paying LBT.

    (Author is a Advocate from Sangli and may be reached by mail at lullakishor@gmail.com)

  35. Kishor Lulla says:

    Sachin nikam – You can adjust the said mistake in next payment and also in the annual return. Also can claim refund after filing of return.

  36. Kishor Lulla says:

    Akshay – for sale in nagpur, you are liable. For sale outside nagpur within 6 months from purchase, you will get 90% refund. During the same calender month of purchase if goods are exported, you are eligible for 100% set off. Better position if godwon is outside corp. area. In that case no question of refund or set-off for export. Only to pay tax for inside nagpur sales.

  37. Kishor Lulla says:

    N.U.Haq – not liable…

  38. Kishor Lulla says:

    Sushil – if you are importing vehicle for the purpose of use outside corporation area then, not liable. The intention and ultimate use is important instead of address.

  39. Kishor Lulla says:

    Rushikesh – Dealer (S. 2[16A]) :

    “Dealer” means any person who weather for commission, remuneration or otherwise imports, buys or sells any goods in the city for the purpose of business or in connection with or incidental to his business and includes factor, broker, commission agent, auctioneer, Central & State Government, Society, Club and A.O.P. As under MVAT Act Port Trusts, Railway etc are also covered to the extent of disposal of goods etc. Non-resident dealers like petrol, diesel and oil companies and their dealers, traders doing temporary business like sale, exhibitions and occasional transactions are also covered. Agriculturist is exempted.

    According to me Trusts and Hospitals will not be liable for LBT as they are not covered under the Act.

    Exception in the definition of dealer.

    Any individuals who imports goods for his exclusive consumption or use and a department of State & Central Government not engaged in business shall not be a dealer.

    Even in sec. 152B (1)- incidence of cess (LBT) the words are “every dealer” —- shall be liable to pay tax. This clearly means any student, employee, housewife who are not dealers and do not carry on any business will not be liable to pay LBT.

    8. Business (S. 2 [5A]):

    i. “Business” includes any trade, commerce, profession, consumption or manufacturer ——carried on with a motive to gain or profit and whether or not any gain or profit accrues——- and whether or not there is a volume, frequency, continuity or regularity in such trade ——. Professionals like Chartered Accountants, Advocates, Architects, Doctors, Tax Consultants and Service Providers are also covered to the extent of import of goods for consumption or use in profession. This will bring taxability on goods like motor vehicle, CCTV, computer etc if purchased from URD in city area or imported from outside LBT area. Registration is also compulsory on the basis of exceeding prescribed limit for registration during the year of notification or preceding year. The dealer is restricted to carry on business, if he is liable for registration, unless he possesses a valid certificate of registration (R.9). The activities of raising of manmade forests or rearing of seedlings or plants shall be deemed to be a business.

    ii. Distinction between business and profession :

    The constitution of India while ensuring under Article 19(1)(g) to all citizens the right to practice any trade, business or profession has maintained a clear distinction between carrying on a trade or business as against practicing a profession. The reason underlying the distinction is that unlike in a trade or business, a profession is practiced without any underlying profit motive. What a practicing professional renders to his client is his services essentially based on his qualification, personal skill and intellectual capacity. All the learned professions have certain common characteristic like statutory recognition of the profession and adoption by the members a self contained code of conduct with statutory checks and boundaries to ensure professional integrity and character along with competence of the members of the profession so as to inspire confidence of the people in the profession. The Supreme Court also has in several judgements maintained the above cited distinction between a trade and business on one hand and the practice of profession on the other hand. The legality of user of premises is governed by the local laws applicable in various states in respect of Shops and Establishments Act, 1948.

    iii. Case law on firm of lawyers :

    In V. Sasidharan V/s Peter and Karunakar (1984) 65 FJR 374 (SC), the question for decision before the Supreme Court was whether the office of a lawyer or of a firm of lawyers is or is not a commercial establishment within the meaning of the Kerala Shops and Commercial Establishments Act (34 of 1960). The SC held that it does not require any strong argument to justify the conclusion that the office of a lawyer or a firm of lawyers is not a “shop” within the meaning of section 2(15).”

    The Supreme Court has also, in several judgments reiterated this fundamental distinction. In National union of Commercial Employees V/s Industrial Tribunal (1962) 22 FJR 25, the Court held that a firm of solicitors was not an “industry” within the meaning of section 2(j) of the Industrial Disputes Act and that the services rendered by the firm were only in the individual capacity of the partners and very much dependent on their professional equipment knowledge and efficiency.

    iv. Case law on private dispensary :

    In yet another case of Dr. Devendra M. Surbi V/s. State of Gujarat (AIR 1969 SC 63 6T), the Supreme Court had occasion to examine the definition of “Commercial Establishment” in section 2(4) of the Bombay Shops and Establishments Act, 1948 and construing the word “Profession” appearing in association with the words “Business and Trade” in the said sub section, held that a private dispensary of a medical practitioner did not come within the definition of “Commercial Establishment”.

    v. Case law on Chartered Accountant :

    One can try by filing writ petition, as not liable as a professional, relying in following two cases. Bombay High Court in A.F. Ferguson & Co vs. State of Maharashtra W.P. No. 1232 of 1995 on 5-5-2006 had categorically decided that the office of Chartered Accountant was not a “business and commercial establishment”. The Court struck down unconstitutional sections of the Bombay Shops and & Establishment Act that included CAs within the definition of commercial establishment. Similar findings were recorded by the Bombay High Court in the case of B. G. Sabne in W.P. No. 1256 of 1992 on 12-9-2006. Chartered Accountants were thus declared by the jurisdictional High Court as “learned professionals” on the same footing as the three traditional professions – church, medicine and law.

  40. Kishor Lulla says:

    PANKAJ BORKAR – you have to open website of corporation or take copy from corp.

  41. PANKAJ BORKAR says:

    please tell me what is the LBT schedule entry of Gold and Silver ornaments in nagpur. please urgent.

  42. Rushikesh says:

    I would like to know abt L.B.T FOR COLLEGES & INSTITUTES WITH SECTION NUMBERS.
    REGARDS

  43. Sushil says:

    Please let me know whether LBT is paybale on Vehical if my residential address come under Gram Panchayat.

  44. N.U.Haq says:

    We supplird material to government department as the material is imported outside lbt area and sell outside lbt area in this circumstancess dose lbt is to be paid or not

  45. Akshay says:

    Sir, i have a warehouse in nagpur which is under LBT. My goods come from indore and i have sale in all states of india. this warehouse act as hub and i store all my goods here. some goods are sold in nagpur and the rest are transported to the respective state’s warehouses for further storage. so is LBT levied on all the goods or only on the goods sold in nagpur? and what if i moved my warehouse out of LBT region, though i will be selling some goods in nagpur?

  46. Asha Muluk says:

    Dear Sir,

    Please let me know the procedure of composition scheme for builders. I.e. what is the first procedure.

  47. Sachin nikam says:

    if we had lbt payment in bank but after 1 month we know the bill are not laible to pay lbt in case can we refund lbt amount

  48. Prasad says:

    Going to purchase a flat as secound owner in aprtment at Kolhapur, construction 10 Yr old i.e. completion 27.02.2004,
    LBT is applicable?
    at what %?

  49. Rakesh says:

    I am a dealer of Earthen Pots and Handicraft materials in Nagpur, Maharashtra,
    Is LBT is applicable for earthen pots and Handicraft materials. I haven’t find any solid proof for same. However I have found that it is exempted from VAT.

  50. Rajiv Sinha says:

    You can obtain LBT registration from Municipal Corporation of your area and pay LBT on materials according to the schedule prescribed by municipal corporation.

  51. Ashutosh.S says:

    i am a construction contractor, i haven’t registered my business, but still i carry out small construction work, recently i got a big contract for that i need to bring in cement & bags within the lbt zone, now i don’t have lbt number, the company from which i am supposed to buy material is outside lbt zone they say lbt will be of mine not theirs end, hence the question is , can i get lbt number as an individual without registering my firm, or can i use some-other person lbt number, the cost of material would be approximately 4lakhs every month.

    do i get temporary lbt number as an individual
    if yes when i am supposed to pay lbt amount and where.
    thanks in advance

  52. Pradeep says:

    Our office and regisetered address is of Thane whereas we store goods at Bhiwandi. We sell all our goods from Bhiwandi to customers who are out of the Thane LBT Limit as we don;t havany customer in Thane.
    Address on the Purchase Invoice is of Thane city but material does not enter the limit.
    Do we need to register for LBT and do we need to pay any LBT.

  53. hesham sainani says:

    i purchase a product from delhi at rs. 1000. i reside in nagpur. and i transfer that product as it is to my branch at indore at cost without any profit at rs. 1000. so whether lbt is applicable to me ? whether i can claim refund if it is applicable?

  54. Deepak says:

    Mr. Kishor Lulla,
    Please let me know whether Transporter is liable to LBT.
    Are there any books or records they need to maintain?
    And they need to register themselves under LBT?

  55. paresh says:

    IS LBT APPLICABLE ON SOFTWARE LICENSES USE VIDE INTERNET OR THROUGH INTERNET LINK OR VIDE SERVER OUTSIDE INDIA IN LBT COPORATION AREA LIKE PUNE FROM OUTSIDE NONLBT CORPORATION LIKE MUMBAI,OR OUTSIDE COUNTRY & MUMBAI PAID THE PRICE FOR THE SAME SOFTWARE LICENSES.

  56. Rajiv Sinha says:

    Please refer sub-rule 4 of Rule 28. In the instant case, job-worker registered under LBT is require to pay Local Body Tax on yarn who convert it to fabrics. Since, the activity change the form of the goods.

  57. Deepak S says:

    Eye lenses import from Pune to Malegaon (Nashik District) by Medical professional for his service to patients. He is Service Provider (Doctor). He required to pay LBT on his import.

  58. manoj shah says:

    I have factory outside lbt area. I send some yarn to my job worker inside lbt area. He makes pure job work and convert this yarn in to fabric. this fabric come back to my factory outside lbt area.now who will pay lbt? how much lbt to pay?

  59. Kishor Lulla says:

    anuradha – yes. leviable.

  60. Kishor Lulla says:

    Aditya – even though not liable if sold outside LBT area.

  61. Kishor Lulla says:

    Atul Karagave – Department is wrong. It need not match. You can show reconciliation. This amount need not be shown in the returns.

  62. Mukesh says:

    i am into manufacturing of brooms(schedule B of LBT – tax free)we sell raw materials to unregistered parties within and outside municipal limits who prepare the brooms and sell back to us.does this aivity attract LBT

  63. Deepak says:

    What it the liability on Transport / Logistics Firms.
    Are they required to maintain any books or records?
    Are they required to register themselves under LBT?

  64. anuradha says:

    I have perchase a immovable property such property take a completion on 26.6.2010 and property is re perchase be me, in that case the LBT is lived @ 1% in addition to stamp duty? or not?

  65. Aditya says:

    But goods are entering the LBT area. My warehouse is in a area where LBT is applicable. But i do not sell goods in that area.Goods are only kept for stoarage and resale.

  66. Atul Karagave says:

    Sir if material is not brought in the city area, then it is exampt from LBT. but where we should show it in the return. I am from Kolhapur. here officers match amount of purchase with VAT returns. if we dont show the amount of products, which are not brought in city area, purchase amount will not tally with VAT return

  67. Kishor Lulla says:

    Aditya – If goods are brought outside LBT area and sold from there, outside LBT area, then no LBT payable.

  68. RAJIV SINHA says:

    Yes, Exemption available under Rule 28 (4), if you meet criteria prescribed under the rule.

  69. Deepak S says:

    LBT applicable if material import for jobwork from outside ?

  70. Aditya says:

    Yes. There is LBT in Vashi Navi Mumbai. HoweverI do Not make any sales in that are. I just use a warehouse in Vashi tokeep my goods which come from Delhi and the are sold to other states/cities.

  71. Kishor Lulla says:

    Amisha – Yes. LBT is on capital asset also.

  72. Kishor Lulla says:

    Deepak Singhal – No rebate or refund can be claimed for any interstate purchase etc. It can be claimed only when goods are sold or branch transfer outside corporation limit, on the purchase of which LBT is paid. Pune Chinchwad Corporation limit is the same where check posts were situated previously.

  73. Rajiv Sinha says:

    152Q – Certain Goods not liable to LOCAL BODY TAX.
    “The State Government may, after considering the proposal of the Commissioner in this behalf, and by notification in the Official Gazette, specify various categories of goods on which no Local Body Tax shall be leviable.”

  74. Deepak S says:

    What is section 152Q ?

  75. Kishor Lulla says:

    Aditya – Please inform whether LBT is applicable in Vashi.

  76. Kishor Lulla says:

    Y S Prabhu – Yes.

  77. Y S Prabhu says:

    whether the onus to pay the LBT is on the purchaser ?

  78. rakesh prasad says:

    Can we claim depreciation benefit on transfer of old capital item ?

  79. Amisha says:

    Is LBT applicable on purchase of fixed asset from outside municipal corporation?

  80. Deepak Singhal says:

    How to claim rebate or refund from LBT for interstate purchases, purchase outside corporation and import purchase . Also require the area covered under Pimpri Chinchwad Muncipal Corporation. Is LBT is applicable on even interstate stock transfer

  81. Aditya says:

    I have my company registered in Dadar Mumbai. I have a Warehouse in Vashi – Navi Mumbai. My good come from Delhi and are sold to various customers all over India. I do not have any sales in Vashi-Navi Mumbai. I only used a warehouse in Vashi to keep my stock of goods. How am I affected by LBT?

  82. Kishor Lulla says:

    Naresh Kumar – You are sending the fabrics from outside LBT area in to LBT area. In other words you are importing the goods in to LBT area for the purpose of mfg. hence you are liable to pay LBT on the import of fabrics. You will not get any set-off as you are not exporting the same goods. X is not liable for LBT.

  83. Kishor Lulla says:

    Niketan Dhumal – LBT is not dependent on VAT or Service TAX. It is entirely different enactment. It is payable on the total amount of value of article which include VAT or Service Tax. Contractor, builder who import the goods is liable to pay LBT either on material purchases or as per lump sump method prescribed in rules.

  84. Rajiv Sinha says:

    it is ok.

  85. lulla says:

    You will be treated as a non resident dealer. You are sending the goods from outside LBT area into the LBT area. In other words indirectly you are importing the goods into LBT area for getting it manufactured from X. Hence, you are liable to pay LBT on the import of fabrics. You will not get any set off for export as you are not Exporting same goods i.e. fabrics. Pure job worker X will not be liable to pay LBT if you pay as mentioned above.In any case there will not be double taxation. It is likely that, if you wont pay, they will catch hold the job worker & the disputes will start.

  86. Naresh Kumar says:

    Dear Lulla ji,
    Thanks for the providing the detail ruls of LBT.
    We are Garment Manufacturer cum Exporter.We need your opinion on LBT for the below situation of ours:-
    Our garment factory is under Municipal limit of LBT in Bhiwandi.

    Our company is owner of the premises and machinery and given the above factory on Contract to say Mr.X person. We sent the fabric form out side LBT limit to Mr.X for making Garment , they are doing purely garment ting JOB WORK for Us. Mr.X is dispatching the garment out side the LBT limit to us. Then we are doing Export out side the Country.

    Now question is 1) Who should take the LBT registration Number our self or Mr.X. 2) In any case This is the Purely JOB work and also Export out side the Country,is any one of us have to pay LBT ?

    We will be very help full if you can give your opinion the matter to us.

    Thanking you
    Naresh Kumar.
    09867488440

  87. S. Rao says:

    Is it convenient and possible to hold seminar at industry associations on the subject matter which to a small businessman is highly confusing. Proper guidance shall go a long way in complying with the requirements.

  88. Hemant Agarwal says:

    Adv. Kishor Lulla, has written a very appreciative article on “Local Body Tax in Maharashtra”. The analysis shall be very helpful to all business persons.

    Hemant Agarwal
    Legal Consultants: 9820174108

  89. Rajiv Sinha says:

    In case of goods imported in the city of municipal corporation of area from own plant situated at different state under stock transfer basis for further processing and return to them. The transaction made under Excise Invoice and valuation done under Rule 8 of CENTRAL EXCISE VALUATION (DETERMINATION OF PRICE OF EXCISABLE GOODS) RULES, 2000. In our view, LBT will be payable on the basis of value declared in such invoice. Please confirm whether it is OK or not in terms of LBT rules.

  90. Rajiv Sinha says:

    In case of goods imported in the city of municipal corporation of area from own plant situated at different state under stock transfer basis for further processing and return to them. The transaction made under Excise Invoice and valuation done under Rule 8 of CENTRAL EXCISE VALUATION (DETERMINATION OF PRICE OF EXCISABLE GOODS) RULES, 2000. In our view, LBT will be payable on the basis of value declared in such invoice. Please confirm whether it is OK or not in terms of LBT rules.

  91. Niketan Dhumal says:

    1) Is the LBT applicable on work contract service ( inclusive of material), In such cases Service tax payable on abatement and VAT also paid on concessional rate – Query : a) Is LBT is payble on value of material carring VAT payment ? b) This material & service are purchased by contractor in LBT area & provided to ultimate consumer then if contractos is not registger then who has to pay LBT ? If it is not paid by ultimate consumer then, is there will be litigatio in future
    2) LBT on Outdoor service: Is such cases also there is abatement as per service tax rule to pay st on 60% of bill value because the BIll includes Service as well as material, Now if Canteen contractor is not registered for LBT and company consumes such goods then is there any liability will be there on company ??? Is LBT applicable on such transaction ??

  92. Kishor Lulla says:

    vinod. software liable

  93. Kishor Lulla says:

    depends on turnover and pur invoices. has to see facts in detail. planning is possible. can call lulla 9422407979

  94. GAUTAM SHAH says:

    dear sir,

    i am a mobile retailer in sangli miraj kupwad corporation area.

    we purchased goods in same area like handsets , or mobile recharge from authorised company dealer who located in same city.

    then
    1. i need to do LBT registration ?
    2 and i need to pay LBT?

    actually yesterday LBT officer visited my shop and they told me to do LBT registration as earliest as possible

  95. Vinod Mane says:

    Dear Sir, Software ( Shrink Pack or Electronically Downloaded ) , liable for LBT

  96. Atul says:

    Sir,

    The LBT provision enumerated above is applicable to all the Municipal corporations wherever LBT is applicable or few of the provisions may be different to different limits.

  97. Arun says:

    Please let me know whether LBT is applicable on software downloaded through internet.

  98. Kishor Lulla says:

    Niketan Dhumal – In the book Maharashtra Municipal Corporation Act.

  99. Kishor Lulla says:

    Sandesh – Please drop detail mail.

  100. Kishor Lulla says:

    Anita – Under LBT Act sender is not liable. Buyer or importer for sale, use or consumption of goods is liable. Colleges are not covered under the definition of dealer sec. 2(16A).

  101. Kishor Lulla says:

    pradeep – You are not liable for LBT. To avoid dispute better to cancel Thane city addresses as well as cancel LBT registration.

  102. Kishor Lulla says:

    jayesh – According to the Act – Liable. But the liability is arguable on the basis of Apex Court decisions. so apply for D.D.Q. and then go for writ.

  103. Kishor Lulla says:

    Vicky8rk – you are liable to pay LBT as payament of VAT and Service Tax does not exempt LBT. For rate of Tax search on your Corporations site.

  104. Kishor Lulla says:

    jamilbhai – on any of the Municipal corporations website.

  105. Kishor Lulla says:

    Vallabh shah- If majority, say more than 60% sales are outside Corporation limit better to have two firms with separate VAT no.

  106. Kishor Lulla says:

    Supriya Gupta – Approach local corporation or call me 9422407979 for detail query.

  107. Kishor Lulla says:

    PRIYA – 152Q – Certain goods not liable to LBT –

    The state Government may, after considering the proposal of the Commissioner in this behalf, and by notification in the OFFICIAL GAZETTE, specify various categories of goods on which no LBT shall be leviable.

  108. Kishor Lulla says:

    Pratyuksh – If goods are imported from outside Corporation limit into corporation limit and exported outside Corporation limit , then either you can claim full set-off in next months payment or obtain permission from Commissioner to pay 10% payment. No tax is payable if export out of India. Please refer rule 32 as amended on 20 June 2013.

  109. Kishor Lulla says:

    kaustubh thakar – on the website of any Corporation.

  110. Kishor Lulla says:

    Peter White – Not liable.

  111. Kishor Lulla says:

    Niketan Dhumal – Definition of sec. 2(70C) is available in Maharashtra Municipal Corporation Act. It is about value of the article for levy of LBT in which all the expenses like fright are to be added.

  112. Kishor Lulla says:

    Niketan Dhumal – Definition of sec. 2(17C) is available in Maharashtra Municipal Corporation Act. It is about value of the article for levy of LBT in which all the expenses like fright are to be added.

  113. Kishor Lulla says:

    Satish – Explain in detail the nature of service industry. Read the definition of dealer u/s. 2(16A).

  114. Kishor Lulla says:

    Abhay – Every Corporation has different schedules. Hence please check respective schedule. Crossing the Corporation limit is not liable for LBT.

  115. Kishor Lulla says:

    Ankita – in the definition of dealer u/s. 2(16A), the trust is not covered. But a society, club or AOP is covered. Please see from this angle. Also unless the educational institute falls under the definition of business u/s. 2(5A), it may not be liable for LBT. It can be said that purchases of trusts are for consumption. So department may levy tax. Better to apply D.D.Q. u/r.31.

  116. Kishor Lulla says:

    Sanjay Gaikwad – LBT is not payable on pure labour charges.

  117. Sanjay Gaikwad says:

    Ours is plastic moulding unit in municiple corporation limit, doing jobwork for our customer outside LBT limit. Plastic granules are sent to us by them and moulded material is returned back to them. Please advice about LBT applicability

  118. Ankita says:

    Whether educational institutions also liable for paying LBT

  119. Abhay says:

    I want to know that whether LBT is applicable on seeds or there is any exemption on seeds. Further my seed plant is outside Municipal corporation area and seed material receiving from outside. I want to know that whether any LBT is applicable when said material will come outside and pass from municipal Corporation area. I want to know that whether LBT is applicable in such cases on material which is in transit only from municipal corporation area.

  120. Sathish says:

    I am working in a service industry. We buy stationeries for office use. Do we need to register under LBT?

  121. Niketan Dhumal says:

    Please let us know the provisions of S.2(70C). where can be available to refer the same

  122. Niketan Dhumal says:

    Where shall I get the details of provision showns in articles like S.2(70C) or S.2(5A) etc.

  123. Anil Ambardekar says:

    The LBT rule says anygoods you get physically in to the corporation limit for use , consumption or sale attracts duty { lbt} .
    Now if you get the goods into your corporation limit you irrecpective from where you purchase you will have to pay the LBT on those goods. In the next month you will have to claim setoff of LBT paid to the extent of 90% on the value of goods you sold/transfered outside the corporation limit . Alternatively if you are selling all the goods outside the corporation limit after purchasing or bringing them into the corporation limit you can pay 10% of the LBT amount after getting the facitly sactioned from the muncipal commisioner .

  124. Sandesh says:

    Gone through all the comments & was able to understand a bit what exactly is LBT is. But still have some queries. We are in to retailing business having stores all over india. We are having our Head office / logistics dept in Mumbai. We normally purchase goods in Mumbai from various vendors situated all over india. Once we receive the goods, we transfer the goods to our various locations / stores situated all over india. Want to know how the lbt will arise in different situations.
    Illustration:

    1. We are purchasing in Mumbai from Noida goods worth Rs. 30,000/- & then we are transferring the goods to Mumbai , delhi & Bangalore Rs. 10000/- each(pure stock transfer to our retail stores, not sale). Whether we will be liable to pay lbt on whole 30000/- or only on 10000 which we are retaining in Mumbai or selling from Mumbai.

    2. We are purchasing goods in Mumbai worth Rs. 15000/- from Noida & of that we are returning goods worth Rs. 12000/- as goods were not getting any response in Mumbai. Whether we will be liable to pay lbt on Rs. 15000/- or it will be only on Rs. 3000/-

    3. Of the goods sent to Delhi as mentioned in 1st suppose We are transferring goods worth Rs. 8000/- from one of our store in Delhi to our Mumbai store (Pure Stock Transfer) whether we will be liable to pay. I mean the number of times we shuffle the stock & call in Mumbai we will be held liable everytime to keep paying lbt.

    4. We are purchasing goods in Mumbai worth Rs. 15000/- from Noida & within 6 months we are returning goods worth Rs. 12000/- as goods were not getting any response in Mumbai. Whether we will be getting credit of LBT for 12000 which we are returning.

  125. Mohd. Azim says:

    GOVERNMENT SHOULD START WORKING ON ONE TIME TAX COLLECTION SYSTEM IN ALL OVER INDIA. IN ONE INDIA THERE WILL BE A ONE TAXATION SYSTEM THROUGH OUT COUNTRY SO NO OTHER INDIAN THINK THAT THEY OVER TAX CHARGED / UNDER TAX CHARGED. THE GOVERNMENT SHOULD DECIDE WHATEVER % OF TAX AND COLLECT THE SAME FROM MANUFACTURER AFTER ALL TAX BURDEN PASSED TO END USER IT MEANS EVERY INDIAN COME UNDER THE END USER. GOVERNMENT THINK POSITIVELY ON ONE TIME TAXATION.

  126. Hitesh says:

    Respected Sir,

    Many thanks for the basic info.

    We would like to know complete Act, procedure of Registration , Bombay Municipal Corporation/ Maharashtra Municipal Corporation fees for registration etc., for our business,and our clients, so if L.B.T. is levied in Mumbai Dist. and Thane City, then we are prepared for it.

    Anticipating update on our quarry.

  127. Anil Ambardekar says:

    please note that LBT is to be paid on any tangible goods brought in to the municipal corporation limit . So if you are buying computers from outside your municipal limit you will have to pay the applicable rate of LBT. If you purchase from any dealer within municipal limit and if such dealer has a LBT registered number then only you will exempted from paying LBT. I hope your query is cleared.

  128. Anita says:

    is lbt applicable on computers sent for educational (training) purposes to colleges. if exempted, where can i get the declaration form?

  129. pradeep says:

    We have registered office at Thane City warehouse at Bhiwandi , we import goods from foreign and sell it . We don;t have a single customer in Thane, but import export license address is of Thane and address on Import invoice is of Thane. We never paid Octrai and never bring material inside city limit. We have declared warehouse in Bhiwandi in the sales tax and excise. What will be changes with LBt and what we need to do to avoide it.

  130. pradeep says:

    We have registered office at Thane City warehouse at Bhiwandi , we import goods from foreign and sell it . We don;t have a single customer in Thane, but import export license address is of Thane and address on Import invoice is of Thane. We never paid Octrai and never bring material inside city limit. We have declared warehouse in Bhiwandi in the sales tax and excise. What will be changes with LBt and what we need to do to save it. If we change all the address to that of Bhiwandi will it help

  131. azi says:

    jayesh LBT is applicable on GOODS and not on services..

  132. jayesh says:

    Is L.B.T. Applicable on Professional services like service provided By C.A. ,Lawyer..

  133. Anil Ambardekar says:

    Yes diamonds are liable for LBT because anything brought in the jurisdiction of the corporation for use, consumption or sale attracts LBT.

  134. Anand Rathod says:

    Is LBT tax liable to Diamonds ?

    If yes than How to liable?

  135. Anil Ambardekar says:

    LBT is also applicable on intangible assets eg on software downloaded .

  136. CA Ashish says:

    LBT applied on all goods including animals.

  137. Vicky8rk says:

    Will LBT be applicable on products on which the company i buy from has already paid Service Tax and/or VAT?

    I Buy a sale-able commodity on which the Company i buy from pays VAT at 5%. Will I have to pay LBT On this? If so, then at what percentage?

  138. jamilbhai says:

    Where shall I get the details rules & regulation of LBT & area cover under nagpur corporation

  139. Vallabh shah says:

    what are the precautions one dealer should, take who has a place of business within mumbai municipal corporation’s limits and also a place of bussiness out side municipal limits say bhiwandi
    he also sells material directly to customer outside mumbai municipal limits

  140. Supriya Gupta says:

    Please Tell me how the form of LBT Coposition Schemes

  141. Supriya Gupta says:

    Please tell me how the form for LBT Coposition Schemes

  142. PRIYA says:

    i want explanation and contents of section 152Q

  143. Pratyuksh says:

    i having import export bussines of alluminium tell me how LBT will effect me.?

  144. kaustubh thakar says:

    Where shall I get the details rules & regulation of LBT & area cover under pune & pimpri chinchwad corporation

  145. Peter White says:

    Is LBT payable on sale of land in Pune district?

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