Local Body Tax and myths about it

==This article is incomplete and will be completed shortly. As this topic is currently under govt. review, it may contain information which may be outdated.==

This article will cover the facts and myths about the Local Body Tax (LBT) स्‍थानिक संस्‍था कर in Mumbai City / Maharashtra.

What is Local Body Tax (LBT) स्‍थानिक संस्‍था कर?

  • Local body tax is a lumpsum amount charged on the value of goods that enter the city or Local Limits specified
  • The local body tax is payable within 40 days of bringing the goods into the city
  • It will be effective from 1-Oct-2013 in Mumbai City.
  • Sales and purchase details to be maintained in a prescribed software.
  • Past data must be stored for a period of 5 years

Whom is it applicable to? What are the limits?

Local Traders

  • having an annual income of Rs 4 lakh
  • must register for LBT.

Traders importing goods

  • having an annual income of Rs 1 lakh
  • must register for LBT.

Traders with annual turnover of 10 lakhs and less who wish to make lump sum payments need not file returns

How is it different from Octroi?

  • Octroi is applicable for goods which are for sale, use or consumption, which enter the local municipal limits
  • Octroi is collected in cash at the entry points to the city

How will it benefit?

  • LBT will reduce the delays that used to take place at the octroi check nakas, as trucks will no longer be stopped
  • The cost of collecting LBT is significantly lower than that of Octroi, saving large amounts of public money
  • Introduction of LBT will reduce corruption that used to take place due to grey areas of the Octroi system
  • E-filing of LBT Returns will help in smoothen the process and also make it more transparent

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