BMC’s special cell to ensure smooth rollout of local body tax

With less than five months left for the local body tax (LBT) to kick in – it will replace octroi from October 1 - the civic body has set up a special cell to collect dealer registration data and formulate area-specific rules for the new taxation system.

With less than five months left for the local body tax (LBT) to kick in – it will replace octroi from October 1 - the civic body has set up a special cell to collect dealer registration data and formulate area-specific rules for the new taxation system.

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The Brihanmumbai Municipal Corporation (BMC) is also putting two softwares in place, which are currently being developed, to compile data pertaining to the registration and assessments of taxes that will be collected.

The government hopes to bring transparency in tax collection and curb corruption with the introduction of LBT, which traders have to declare and pay after bringing goods into the city, unlike octroi, which is recovered immediately at the various entry points. Questions are being raised about the effectiveness of LBT as many fear it will reduce the Brihanmumbai Municipal Corporation’s (BMC) revenue.

At present, the special cell comprises 12 assessment officers, but the BMC’s assessment department is planning to recruit more staff and set up offices across the city. The cell is also working on formulating rules for levying penalties on defaulting dealers based on consumption patterns and volume of goods, among other things.

“Once the system is in place, we will receive a lot of returns that have to be assessed. For this purpose, we are developing software to show all imports, invoices, calculated tax, claims for deductions and refunds, which we will have to assess,” he said.