CA Vikash Kumar Agarwal
It is announced by the Government of Maharashtra that Local Body Tax (LBT) will be implemented in the Pune, Pimpri-Chinchwad, Navi Mumbai, Thane, and Nagpur with effect from 1 April 2013.
- Goods brought inside the limits of respective Municipal Corporation for consumption, use or sale therein will attract LBT.
- A dealer registered under the MVAT Act having place of business within the limits of respective Municipal Corporation shall be deemed to be registered under LBT.
- A dealer having more than one place of business in two different corporations will have to obtain separate registrations of LBT in respective corporation limits.
For e.g.:- A dealer having places of business in PMC or PCMC will have to obtain separate registration for both municipal corporations.
- A dealer having multiple places of business within the same corporation limits shall be issued the copy of registration certificate for each additional place of business specified in application of registration. Needless to say that the registration number shall be the same for all the places of business within the limits of same corporation.
- The Turnover Limits for obtaining Registrations shall be as follows:
Class of Dealer
Taxable Turnover during year (of goods specified in Sch. A)
Total Turnover (Taxable as well as Tax Free) during year
(of all sales OR of all Purchases)
>=Rs.1,00,000Value of all imports(taxable or tax free) during the year>=Rs.50003(1)(b)Any otherPurchases >=Rs.5000>=Rs.1,50,000 -3(2)Temporary – –
Carrying on business in city in any year on a temporary basis.
- Records to be maintained for each place of business for purchases and receipts of goods on transfer basis in the prescribed format of Form D as follows:
Purchase Register or Register of Goods
Invoice No. and Date
Name and address of Vendor
Local body tax. Registration No. (If not local then place from where goods moved)
Purchase value of goods/Processing charges chargeable to local body tax
Local body Tax Payable
- Every registered dealer is required to issue Bill, Invoice or cash memo containing a certificate specified in rule 22(a) as follows :-
- “I/we hereby certify that my/our registration certificate under these rules is in force on the date on which the sale of 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.”
Payment of LBT
- Every dealer other than the dealer who has opted for composition is liable to pay tax for every month within 10 days from the end of the month.
- Non-payment of LBT within the prescribed time shall attract interest @ 2 % per month or part thereof for first 12 months and thereafter @ 3 % per month.
Returns: Every registered dealer who has not opted for lump sum payment of tax is liable to file following returns:
- Half yearly returns for the 1st six months upto 30th September in Form E-I within 15 days from the end of the period; and
- Annual return in Form E-II within 15 days from the end of the year.
- The dealer importing the goods, if exports the same within six months outside the corporation limits can claim 90% refund of LBT paid on such imports subject to conditions prescribed.
- If the goods sold and exported outside the city limits are received back on account of rejection within six months then no LBT shall be leviable on their return.
- Where a dealer receives the goods from outside the corporation limits for undertaking specified processes and the processed goods are sent back to the same party within six months then he is not liable to pay LBT subject to conditions.
- Where a dealer moves goods outside the city for carrying out the specified processes and re-imports the same without effecting any change in the product then LBT shall be leviable only on the value addition during the processing.
- The dealers engaged in job work receiving the goods from outside the limits of corporation are required to maintain the records as prescribed in return Form E-I & E-II.
- The dealer engaged in the export of goods outside India shall be exempt from the LBT in respect of the goods used for the purpose of such exports.
- The dealers having turnover upto Rs.10 lakhs1 can opt to pay lump sum amount of LBT by way of Composition as per the table prescribed under rule 27.
- The dealer whose turnover is or will be below Rs. 10 Lakhs and desires to opt for composition has to file an application in Form R for obtaining the permission to pay lump sum payment of tax.
- Every dealer who has opted for compositions scheme is liable to pay tax within 15 days from receipt of order granting permission for composition scheme
- The dealers who have opted for lump sum payment of tax are liable to file annual return in form E-II within 15 days from the end of the year
Composition Scheme for Builders and Contractors:
- For builders and contractor a separate Composition scheme is prescribed as per Draft Rules under Notification dated 30th June 2012.
- As per this scheme, the builder or contractor shall have the option of making lump sum payment of LBT as follows:
|For construction upto 4 Floors (without lift)||Rs 100 Per Sq. Meter|
|For construction upto 7 Floors (with lift)||Rs 150 Per Sq. Meter|
|For construction of high rise building (above 7 floors)||Rs 200 Per Sq. Meter|
- The contractor who opts for such composition scheme may make the payment of LBT to the extent of 50% in advance on applying for grant of commencement certificate for such construction.
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 works or alternatively paying the said tax on lump sum basis at 0.25% of their total amount of contract value.
CA VIKASH KUMAR AGARWAL
CHIEF FINANCIAL OFFICER
THE KOTHARI WHEELS