Sells all goods outside limits of Mumbai. Presently not incurring Octrio since goods are not consumed in Mumbai. If same struture then as per your answers before LBT payable then. IF registration changed to outside mumbai outside municipality limits is LBT payable then.
Sanjay Gupta If you are importing or purchasing the goods and keep outside the municipal limit LBT would be applicable on 1st October in Mumbai As far as my understanding goes.
Octrio is payable if the goods enter the muncipality limits of mumbai. And the logic of octrio is if it is consumed in mumbai octrio should be paid. If I register my cimpany and carry out business outside mumbai limits where no lbt is applicabke say bhiwandi is the law satisfied and no lbt applicable. Is the maharastra govt and the bmc serious for promot8ng small business in mumbai. How do I compete with delhi or any other city if I operate from mumbai.
I dont cater to the mumbai marjet at all and only because my company is in mumbai I have to pay lbt Pls clarify lbt or octrio is applicabke if goods consumed in kimits of mumbai. If not otherwise why there is a system of N form. Its the unjust tax that is being levied by. Maharashtara goverment , they are in a day dream of collecting huge amount through LBT , but many association doubt that there will be no business in the near future after imposing LBT , as good from outer state will be cheaper then maharashtra due to this extra Tax system , mumbaikars will not be able to compete in business with out of state business , so naturally its going to drop with sharpp decrease.
Such companies used to have warehousing outside BMC limits their purchase being Imports from foreign countries OR factories outside Mumbai limits and they carry out their distribution all over india from their warehouse. If they have any sales in mumbai they used to pay octrio only for the goods getting inside and sold in mumbai. I disagree when you say the word LOOPHOLES since it means that the law is being twisted to avoid payment of Octrio Now pls suggest how such companies can carry out the above activity within the framework of the law.
If the company cannot operate without the incidence of Octrio, it will render it out of business since companies registered outside mumbai will have substantial cost savings of Octrio cost. When I sell in Navi Mumbai, I make the cess a part of my cost. All municipal corporations in the state of Maharashtra will start implementing LBT within due course..
So there is no escape… and as far as LBT is concerned it is lower than the Octroi. Therefore you are not loosing much more. Hi Anita.. Thanks for the Comment : Regarding your query No Refund or set-off Mr shridhar. The average margins in the business are so low nowadays that it will hardly just cover the octrio payable.
How will anyone compete with companies outside maharashtra who save 4. Would shifting there save lbt cost. The only alternative for business where sales are all over india is to shift from mumbai Many thanks for your guidance. But if you are procuring material from India and then exporting You have to pay the Local Body Tax Sir, We are the manufacturer of cement , we regularly transfer our cement to have selling depots by way of stock transfer in Nagpur amravathi.
If so on what value consider there would be no selling price for stock transfer. Can we collect the amount from customers at the time of sale? Please suggest , Shall be grateful to you Dileep Kumar. Hello Sir, Thanks For the guidelines, here are some queries.
Will you tell us about Payment procedure of LBT? We are exporters of Whole and powdered spices situated in Navi Mumbai. We procure from all over India. We do not sell any goods locally. Dear Shridhar, Just went through your comments and it solved most of my queries. I still have a few though and would appreciate if you could solve them. I am located in Bhayandar and we purchase material from Vasai.
Now both of them are different LBT zones. One of my products has two parts for instance. On my purchase of goods, I have to pay LBT. But do I need to pay LBT on the transportation cost incurred in getting these goods in? The local office says we have to pay but in the return forms there is no column to fill in these costs.
Your help would be much appreciated. Regards, Neel. Just a small addition to my previous comment. Our company is a star export house and I went through Notification No. Thanks in advance for the help. Please clarify.
I have registered off in bhiwandi. Dear Sir, We are importing goods from Europe and stocking in Bhiwandi Warehouse and resale to other states. Sir we are in textile in surat we purchse yarn from south and send it to job work in tarapur and after that send grey to proccess for dyeing and sell it from surat then will i liable to pay lbt.
Dear Sir, We have a manufacturing unit in Thane. We buy raw material from thane itself, process it and sell at retail shops in thane, mumbai, navi mumbai, pune etc. Pls clarify at what stage we will have to pay the LBT. Is there any waiver for micro small scale industries. Also, when is it that the LBT officials can official collect the taxes. Because there are few people who are targetting small enterpreneurs who take up stalls in exhibitions and collecting random amounts from them in the name of LBT.
Vishal Rathi But if you purchase the material within the zone then there will be no local body tax. LBT is to be deposited in banks only. Regarding your query… If you purchase material within thane … then there will be no LBT.
And as far as your sales is concerned, your customers have to pay the LBT for their purchases Vijay Walawalkar.. Yusuf Mukadam Sir, I have couple of queries: 1 I am a trader based out of Mumbai. If I purchase goods from outside Maharashtra and sell it to a customer who is also outside Maharashtra goods do not enter MH. Then is LBT payable then?
My bike is with the dealer for RC book processing, etc. What should i do? We are required to send the finished and semi finished product from 1 unit to 2nd unit for testing and then return to original unit. Earlier we used to do Shera Pass and claim octrooi refund on such cases. What will be the scenario with LBT?? Pls guide. Thanks - Sangamesh Patil. If it is not applicable.. Dear Shridhar, We are into distribution of goods and our office is based on Ghatkopar.
We import goods from Honk Kong and the same goes to our Bhiwandi warehouse which is outside local limits. The same is then distributed throughout India.
As this is a tax on Purchase and not on sales , are we affected as we do not by anything locally?? Hi Shridhar, My brother is having firm out side LBT limits and also having branch of same firm within LBT limit and his purchasing on address out side LBT limits in such case what will be the tax position or he will have to form two separate firms.
Pls clarify. We will not be able to compete with compititors outside our state , because their material will always be cheaper bcz they don't have to pay this extra tax LBT , only maharashtrian are being harasshed in this LBT , can Mr sridhar reply to this.
Many peoples will get jobless after this LBT , because many business will move out from the state , can we request the government to provide employment for them , also many industries have started shifting from maharashtra to other states but still government have no interest in the state business peoples.
I purchased the goods within city limits and sold it to another retailer and then he sold to end customer now how lbt will be charged and if possible can you upload a sample invoice for all assuming the turnover is above 5 Lakhs Also if I provide service within city limits not sale just service like repairing commissioning maintenance do I need to charge LBT again assuming Turnover above 5 L Again Turnover for sales and service will be separate or one.
Hello shridhar is this is applicable to kirana stores in kandiwali. Plz rply. Kishan Patel Vijay Surve.. Mrugesh Shah.. If you purchase within city limits then there will be no LBT … but if you purchase from outside city limit then LBT will be applicable.
No LBT on re-selling within city limit. Shakshi… Yes.. Company Law 7, Corporate Law 8, Custom Duty 8, DGFT 4, Excise Duty 4, Finance 5, Goods and Services Tax 18, Income Tax 38, Provided that a dealer to whom sub clause a does not apply but sub clause b applies and whose turnover of all sales or of all purchases or of all imports first exceeds the relevant limit prescribed in this behalf after the first day of April of the year in which the Corporation has decided to levy the cess, shall not be liable to pay cess in respect of the goods imported by him into the limits of the City for consumption, use or sale therein up to the time when his turnover of sales or of purchases or of imports as computed from the first day of April of the said year, does not exceed the relevant limit prescribed in this behalf.
Dealer S. Section 70A Turnover of Purchases — means the aggregate of the amount of purchase price paid and payable by dealer or a person in respect of any purchase of goods made by him during a given period after deducting the goods returned by him to the Seller within span of six months.
Section 70B Turnover of Sales — means the aggregate of the amount of sale price received or receivable by a dealer or a person in respect of any sale of goods made by him during given period after deducting the goods retuned to him by Purchaser within span of six months and where the registration certificate is cancelled the amount in respect of sales made before the date on which the cancellation became effective, received or receivable after such date.
To be liable under LBT, business organization must be engaged in business of buying or selling of goods in a particular city. Thus determination as to whether a particular business organization is a dealer under LBT is decided based on business activity in each city separately and thus status as a dealer under LBT is qua city and not as a legal entity.
Once it is determined that a particular organization is a dealer under LBT, then requirement of registration under LBT is based on turnover limits for purchases and sales.
It is observed that these definitions nowhere refer to purchase or sales made in a particular city and hence on conservative basis these should be taken as purchase or sales made in Maharashtra as a legal entity by the dealer. Applying above cumulatively therefore it appears that where an organization carries on business of buying or selling in a city covered under LBT and where turnover of purchases or sales made by such organization in Maharashtra in other words Turnover as per MVAT is more than Rs.
Such big organizations should therefore continue to remain registered and pay LBT in respect purchases of goods made into the city even after the amendment. It appears that Small organization whose turnovers for FY were less than Rs. This view however needs to be confirmed by authorities through necessary circulars clarifying the position before decision for the same can be taken by business organization.
Author may be contacted for further clarifications and support for specific problems of particular business organization at [email protected]. Readers are requested to send their feedback and also mail queries which they may have about eligibility of their organisation under the amended exemption criteria. Dear Sir, I am having branch office in Pune outside octroi my turnover is 20 crore and in city around 10 crore yearly.
My headoffice is in Mumbai and having turnover of Rs. Can I become liable for LBT. We are having a turnover of Rs.
We have around two branches other one branch are in PMC Corporation outside area and one branch at Pune city. Our turnover at Pune city will be around Rs.
Kindly suggest whether we are taxable to LBT or not. We have around four branches other three branches are in M. In , the Indian state of Maharashtra and a state in Ethiopia were the only known places to levy octroi. The tax system has been existent in Maharashtra since the year Instead, local body tax would be imposed in the municipalities of Pune, Nagpur, Mumbai, Thane and Pimpri-Chinchwad during the same year. Traders, however, were not too keen over the new tax system and protested over it.
After reconsideration, local body tax was partially scrapped in Maharashtra in August As per the amended rules, only dealers with turnover of sales or purchases greater than Rs. Local body tax is levied on goods brought inside the limits of respective municipal corporation for sale, use or consumption. Some of the goods on which local body tax is applicable on are:. Finance Department No. Under the Amnesty Scheme also called The Maharashtra Municipal Corporations Local Body Tax Amnesty Scheme , penalty and interest on the pending dues of local body tax shall be waived for the amnesty period of 3rd June, , to 31st July, , subject to the fulfilment of certain conditions, like registration, payment of tax, filing of returns, etc.
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