A frantic rush to introduce the local body tax by October will mean that the Brihanmumbai Municipal Corporation (BMC) might not have a vigilance wing to take action against traders, if they under-declare the value of their goods. While it will be a setback for the civic body, it could provide to be of relief to traders.
Starting Monday, traders across the city have announced an indefinite strike against the imposition of the LBT. “We are looking at a tight, evasion-proof system for collecting LBT. For the first year or so, we would not be able to carry out any vigilance activities, as it will take time to develop the vigilance wing,” said a civic official on condition of anonymity, as he is not authorised to speak to the media.
Consequently, the civic body will have no choice but to believe the traders when they declare the imported commodities. Additional municipal commissioner Rajiv Jalota said that the civic body had other priorities. “Vigilance is the last option for us. For us, the first priority is to register as many traders as possible. That way, we will be assured of tax collection.”
A senior official, however, confirmed that vigilance could be a problem. “The income tax department doesn’t conduct raids in every case. There are processes that are carried out before the raid. Though we are planning the course of action, the wing might not be ready when we decide to impose the tax. In due course, however, it will be ready.”
The processes include comparison between the sales tax paid by a trader with the LBT paid by it.