Traders cry foul over govt’s U-turn on LBT

PUNE: With the BJP-led state government stepping back on the pre-poll promise the party had made to immediately abolish local body tax (LBT), traders said the party had played a cruel joke on them and they would resume agitation if the tax was not abolished. Civic bodies were, however, relieved that their key revenue source was in place for now and urged traders to start paying the tax.
Chief Minister Devendra Fadnavis met chiefs of all 26 municipal corporations on Thursday to discuss the abolition of LBT and the possible alternatives for the local bodies to generate revenue. During the meeting, the government indicated it was unlikely to scrap LBT until the goods and services tax (GST) was introduced by the Centre.
After the meeting, Pune Municipal Corporation (PMC) officials said LBT will stay for the time being. “Government officials and state leaders stressed that traders should not avoid paying the tax anticipating its abolition,” said Vilas Kanade, head of PMC’s LBT department.
Civic body chiefs were relieved, even as some said they were preparing ground if the LBT does go eventually. “No final decision was made in the meeting regarding abolishing LBT. The PMC is working on options in case LBT is abolished,” Pune municipal commissioner Kunal Kumar said.
However, Kolhapur additional municipal commissioner Nitin Desai, who was in Mumbai for the meeting, said, “The state has not cancelled LBT. It is a major relief for the corporation as we need the tax. Traders should cooperate and pay the tax.”
Officials said the civic administration has seen LBT payments drop in the last couple of months with traders delaying payments. For traders in Pune, who were certain that the new government would abolish the tax as promised before the elections, were both disappointed and angry on Thursday. “Before going to polls, the BJP leaders had promised that they will do away with the tax if it formed the government. If the state government does not withdraw LBT, it will amount to betrayal,” said Popatlal Ostwal, president of a traders’ organisation in Pune.
Angry reactions came in from other parts of the state as well. Ravindra Tendulkar, a trader from Kolhapur, said, “The traders are in favour of charging a surcharge of 1% on the current Value Added Tax (VAT) rather than paying separate LBT. We will not pay LBT but we will pay the revised VAT. It is up to the state government now to decide.”
President of Nashik Dhanya Kirana Ghauk Sanghatna Prafulla Sancheti said they have been hearing about the GST since the past two years. “If they are depending on GST to scrap LBT then it is a very cruel joke on the traders. Even now, there is time to take the decision regarding LBT. Else, we will agitate,” Sancheti said, adding, “We are dejected and feel cheated. We demand that LBT be scrapped immediately. The CM should keep the promise he made to us,” he said.
The CM’s directive that officials offer alternatives to the government has some traders hopeful. Uday Lodh, president of Federation of All Maharashtra Petrol Dealers’ Association (FAMPEDA), a body of petroleum products dealers, on Thursday said the government would take dealers in confidence before taking a final call on the matter. “Things are at a primary stage and the government has not yet framed a policy,” he said.