Mumbai: In a good news for people of Mumbai, retailers called off their strike against the Local Body Tax on late Saturday and said they were ready to talk to the government. The announcement came even as the city struggled with shortage of supplies due to the three-week long strike.
Supporting the agitation by Maharashtra traders against the newly introduced Local Body Tax which replaces octroi, Indian Merchants' Chamber had on Saturday asked the state government to re-consider integrated measure of tax collection. The agitation was on for the last three weeks.
"It has always been our view that octroi should be abolished and we appreciate the government's initiative. However, with the new LBT, we feel that creating multiple centers of tax registration and collection is not advisable since it will encourage corruption," IMC President Niranjan Hiranandani had said in Mumbai. LBT will also lead to extra burden on the consumers, he had said.
"LBT will make things complicated. Besides, since the tax will be collected from the traders, they will definitely transfer the extra financial burden onto the customers," Hiranandani had said, adding, "It will result in rise in inflation".
"While the government is trying to eliminate number of windows and to have one window system, the state government is introducing one more window in the form of LBT, which would breed corruption," he had said. IMC has suggested that instead of introducing a new taxation system, the tax in lieu of octroi should be integrated with VAT by adding 0.5-1 per cent surcharge.
"This should further have a clear provision that additional 1 per cent surcharge would be diverted to BMC (Mumbai municipal corporation) or other local bodies. "This will allay the fear of BMC that it will not get funds from the state through VAT collection and will go bankrupt after the abolition of octroi," he had said.
Meanwhile, the state government has decided to set up a committee under the chairmanship of Chief Secretary Jayant Kumar Banthia to submit recommendations regarding LBT. The committee will have to submit the report within a month. Earlier on Friday, speaking to reporters in Pune, Chief Minister Prithviraj Chavan had said: "We have kept our doors open for discussion to simplify the tax procedure and traders should not hold common man to ransom."
(With additional information from PTI)