Days after an expert committee said local body tax (LBT) would be the most effective alternative to octroi, BMC held a meeting Friday to discuss its implementation. The state government wants to abolish octroi and replace it with a more accountable and transparent model of tax collection.
CM Prithviraj Chavan has already discussed the issue with finance ministry officials. The BMC tax department, in its presentation before other civic officials, explained how LBT would work. Octroi is a tax levied on goods as they enter city. It is a cash payment.LBT, on the other hand, is a lump sum charged on value of goods and is payable within 40 days of bringing goods in the city. To ensure LBT is paid, it was suggested those evading the tax must be charged with a criminal offence.
Shiv Sena, which rules BMC continues to be apprehensive. Mayor Sunil Prabhu said considering that almost 45 per cent of revenue generated in BMC was through octroi, the government must not be hasty in abolishing it and implementing LBT.