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Local Body Tax (LBT) under Maharashtra Municipal Corporation Act (LIX of 1949)

Chargeability of LBT:

Corporation may impose LTB on the entry of goods (purchases) into the limits of the city for consumption, use or sale therein in lieu of octroi or cess, if so directed by State Govt. in OG.

Important Points:

  • LBT shall not be chargeable on purchase of goods within the City.
  • Good must be imported from outside the limit of city.
  • Outside the limit of city include goods imported from other state as well as outside India.
  • It is a City wise Tax in lieu of octroi or cess.
  • It is not levied for entry of goods in Rural Areas.

 Exemption in levy of LBT:

1. Goods Imported into limit of the city by State Govt. or Central Govt for public purpose and not for profit.

2. Goods Imported in to the limit of the city on behalf of  State Govt. or Central Govt for public purpose and not for profit.

3. Goods are moved out from the city for specified processes and re-imported in to the limited of the city then LBT is exempt extent to the value of goods subject to prescribed conditions.

4. Goods imported by dealer in the city for carrying out the specified processes on Job work basis subject to prescribed conditions.

5. Goods returned from other city due to rejection of goods.

6. Exporter of goods outside India shall not be liable to pay LTB on value of goods used for such goods.

Rate of LBT:

LBT is charged on goods specified in Schedule A at a prescribed Rate in this schedule.

Certain goods are exempt from LBT which is specified in Schedule B.

Registration:

Once LBT is applicable on goods imported by dealer, the dealer would be required to obtain registration under the Act.

The threshold limits of turnover for registration are as under:

  1.  

For Importer

Value of goods imported is less than equal to Rs. One lakh per annum.

     2.

For other than (1)

Turnover of all sales or purchases is less than equal to Rs. Five lakh per annum 

a. Dealer shall be liable for registration within 30 days from the day on which this tax come in to force of date of exceeding the threshold limit whichever is earlier.

b. Application for registration shall be made in form A to the commissioner along with fees of Rs. 100.

c. A dealer who is register under provision of Maharashtra Value Added Act, 2002, shall be deemed to be registered under it.

Dealer to Maintain Register:

Every dealer has to maintain register of purchase and receipt of goods on transfer basis in form D.

Registered Dealer shall issue Bill or cash memorandum for all transactions having value more than ten rupees.

Payment of LTB:

LBT is payable on monthly basis and the due date of payment is 20th of next month following the month to which the tax relates.

Composition Schemes:

1. If a Registered Dealer having turnover of all purchases during the year, is less than10 lakhs then he has an option to pay tax on lump sum basis for which he shall submit a declaration in Form R to Commissioner. He shall pay the tax amount within 15 days of receipt of order in following Manner:

S. No.

Turnover of Purchases

 LBT

  1.  

Up to Rs. 1,00,000

 NIL

     2.

1 lakh to 2 lac

 Rs. 4,000

     3.

For each increasing 1 lakh or part of that upto 10 lakhs.

Rs. 4,000 + Additional 2,000 up to Rs. 20,000

In case turnover of purchases exceeds the limit of ten lakhs then Dealer shall have to make payment the differential amount of LBT assuming that composition scheme is not applicable to him.

2. Composition scheme for Builders:

S. No.

 Particulars

 LBT

  1.  

For construction upto 4 floors (where building is without lift)

Rs. 100 Per Sq. Meter

     2.

For construction upto 7 floors (where building is with lift)

Rs. 150 per Sq. Meter

     3.

For construction of High rise building (Above seven floor)

Rs. 200 per Sq. Meter

The Builder who opts for this scheme may make payment of LBT, in advance to the extent of 50% of such amount due, on applying for grant of commencement certificate for such construction.

3. Composition scheme for Work Contractors:

He has a option to pay LBT @ 0.25% of Total Contract value.

Interest on Late Payment:

If a Dealer fails to make payment of LBT on stipulated time than he shall be liable for interest @ 2% per month on such Local Body Tax.

Refund of LBT:

Where dealer imports goods from outside the City and LBT due on it has been paid, if such goods is exported to other person outside the city otherwise than under contract for sale or sold such goods outside the City then 90% of LBT paid by dealer shall be refunded subject to prescribed conditions. The eligible dealer shall make an application for refund in form I.

Interest on refund shall be payable if refund is not issued within 2 month from the date of filing the application then interest @ 6% shall be payable to the dealer along with refund.

Filing of the Return of LBT:

Every registered dealer shall file Return of LBT Annually within 90 days of the end of financial year to which the LBT relates in Form E-II.

If dealer is a casual dealer then he shall file the Return in Form E-I on 10th of next month or part of month in which he discontinue the business in the City.

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