LOCAL BODY TAX (LBT) (As applicable to Pune Municipal Corporation)

PRESENTED BY

A.N.GAWADE & CO CHARTERED ACCOUNTANTS

(For Private Circulation only)

Date: 27th April 2013. (Updated as per Amendments Notification dt. 25/4/13)

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Content Reference

1. Applicability

2. Persons Covered

3. Rates Applicable

4. Registration Process

5. Registers to be Maintained

6. Consequences of Non Reg.

7. Periodicity of Returns

8. Period of Payment

9. Refund Process

10. Important Points

11. Respective Forms

12. Example for reference

13. How to Calculate LBT

14. Contact Details

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Applicability

Applicable from 01/04/2013

Applicable to following types of trades

1. Importer ( Person importing goods from outside the Municipal Limits into Municipal Limits)

a. Turnover of goods(Purchased/sold) specified in Schedule A is more than or equal to Rs.5000/- and

b. Turnover of all goods imported is more than or equal to Rs.5000/- and

c. Turnover of all goods is

i. in case of corporations having population more than or equal to 20 Lakhs, turnover is more than or equal to Rs. 300000/- in a year and

ii. In other corporations if turnover is more than or equal to Rs. 100000/- in a year

(ALL ABOVE MENTIONED CONDITIONS NEED TO BE SATISFIED)

2. In other cases

a. Turnover of Goods specified in list provided in LBT Rules is

more than or equal to Rs.5000/-

b. Turnover of all goods is

i. In case of Corporation having population more than or equal to 20Lakhs , if turnover is more than or equal to Rs. 400000/- in a year and

ii. In other corporations if turnover is more than or equal to Rs. 150000/- in a year.

(BOTH THE CONDITIONS NEED TO BE SATISFIED)

3. If person carrying business in Local limits on Temporary basis . He is also required to take the registration under LBT.

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Persons Covered- Both Vat and Non-Vat Dealers

All Proprietorships

All Partnerships

Companies, LLPs

Trusts

Service Industries such as Software Companies, CAs, Advocates,

Hospitals, etc.

HUF, AOP, BOI

Govt. Departments who import goods for Profit.

(Note: Applicable only if turnover criteria is satisfied.)

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Rates Applicable

Turnover of Purchases and Applicable LBT

a. 1 Lakh to 2 Lakh Tax Rs. 4000/-

b. 2 Lakh to 3 Lakh Tax Rs. 6000/-

c. 3 Lakh to 4 Lakh Tax Rs. 8000/-

d. 4 Lakh to 5 Lakh Tax Rs. 10000/-

e. 5 Lakh to 6 Lakh Tax Rs. 12000/-

f. 6 Lakh to 7 Lakh Tax Rs. 14000/-

g. 7 Lakh to 8 Lakh Tax Rs. 16000/-

h. 8 Lakh to 9 Lakh Tax Rs. 18000/-

i. 9 Lakh to 10 Lakh Tax Rs. 20000/-

10. Above Rs. 10 lakhs Rate is specified in Schedule A according to the goods.

Dealers opting for above scheme, NEED NOT to file returns .

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Rates Applicable for Builders

Another alternative is available for builders and contractor who

undertake the work of construction can pay LBT on lump sum basis in

following way:

a. Construction up to 4 floor Rs. 100 per square meter.

b. Construction up to 7 floor Rs. 150 per square meter.

c. Construction above 7 floor Rs. 200 per square meter

Any Developer or person undertaking any work within Municipality limits

have an option of either paying LBT on value of goods imported into local

limits. OR

paying tax @ 0.25% of their total contract value.

For On Going Contracts as on 1.4.13, normal taxation (Commodity wise)

is advised in absence of clarity.

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Registration

How to Register

- Person registered under MVAT within Municipal jurisdiction is deemed

to be registered under LBT- No need of separate registration under

LBT. LBT Certificate will be issued directly without any procedure.

However person who is registered under MVAT outside Municipal

jurisdiction but carrying out business activities within Municipal jurisdiction

required to get registered under LBT separately.

- Every person to whom LBT is applicable is required to apply for

registration within 30 days in Form A as issued by the State Govt for

said purpose.

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Registration Process

Documents Required for Registration

1. PAN Card

2. Residence Proof of Dealer

3. Address proof of Place of Business

4.Copy of Shop Act Shop Act License

5.Copy of VAT registration Certificate

6.2 Photographs of Dealer /Authorized Person

7. In case of Company or Partnership Firm, names of partners and

directors are to be mentioned in the form and affidavit shall be

submitted within 3 months from the date of application.

Note: The process of registration will start online from 15th March 2013.

And documents are need to be submitted at Octroi Dept Near PMC.

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Register to be Maintained

Every trader to whom LBT is applicable is required to maintain following details as required by State Government in Form D also required other details

1. Name and Address of the Vendor

2. Vendors LBT Reg. No.

3. Commodity

4. Purchase Value of Goods/ Processing Charges

5.LBT Payable

Form D (purchases and receipt of goods Register)can be maintained in Computerized format. Dealer maintaining register in Computerized format is required to produce documents maintained under VAT on demand to Commissioner.

Note-

1. Register should be chronologically maintained

2. Entry of goods to be as per date of receipt in City

3. Incorporate the details of purchase/import viz-

a. Invoice No and Date

b. Name and Address of selling dealer

c. Local RD and RC no. (If any) Else place from where goods are moved

for sale by selling dealer

d. Purchase price in case of Branch transfer i.e. Value of Goods.

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Consequences of Non registration

1.For non registration of a person or

2. Person who is not registered but showing as registered

3.Submitting falsified returns

4.Submitting falsified documents for registration

5.Providing incorrect information in accounts

6.And person who trying to evade tax, etc.

- will be liable for a penalties from one times to five themes of the

amount involved.

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Periodicity for Return

Every person to whom LBT is applicable is required to submit returns in

form E-I six-monthly for first half year and in form E II for the

year. Even though it is nil. Penalty for non filling of Return penalty is

Rs.5000/- per return.

Period Date of Filling Return

1. April to September E-I Before 15th Oct

2 April to March E-II Before 15th April

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Period of Payment

Every person to whom LBT is applicable is required to pay LBT every month.

Interest for late payment will be @ 2% per month.

Month Date of Payment

1. April 20th May

2. May 20th June

3. June 20th July

4. July 20th August

5.August 20th Sept.

6. Sept 20th Oct

7. Oct 20th Nov

8. Nov 20th Dec

9. Dec 20th Jan

10. Jan 20th Feb

11. Feb 20th March

12. March 20th April

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Period of Payment

Registered dealer whose turnover of all purchases is less than Rs.

10 lakhs can opt for a payment of lump sum amount of LBT

subject to condition specified in Rule 27. Persons opting for such

scheme are not required to file Returns.

For this facility person is required to furnish a declaration in Form

R to Commissioner.

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Refund of LBT

In case of excess payment of LBT trader required to apply for refund .

In one month LBT application will be processed and within next one

month refund will be issued.

If it is not issued within two month from date of application , refund will

be issued with interest .

90% of the eligible amount will be refunded in case of Export of Goods.

For regular exporter option of payment of LBT @10% of applicable rate.

Eg. 1.Date of Application for refund : 01/04/2013

2. Date of Process of Application : before 30/04/2013

3. Date of Issue of Refund : before 31/05/2013

4. Not issued before 31/05/2013 : Interest from 31/05/2013 will be

issued.

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Important Points

Good for which rate of VAT is 0% , rate for the same under LBT

will also be 0%

Where as goods for which VAT is chargeable but no Octroi duty

is payable , rate for same under LBT will be 0%

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Respective forms

Form A Application for Registration

Form D Purchase Register or Register of Goods

Form E-I Return Cum Challan (Half Yearly return )

Form E II Form of Annual Return.

Form R Declaration for permission to pay lump sum amount of LBT.

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Example with Calculation (LBT is

applicable on all taxes as well) For Example

Goods imported into PMC limits worth Rs. 10000/- as on 15th April 2013

(Applicable VAT Rate – 12.5% and LBT- 2%)

Value of Goods Rs. 10000/-

Add: VAT @ 12.5% Rs. 1250/-

-----------------------------

Sub-Total Rs.11250/-

Purchaser is required to pay LBT @ 2% on Rs.11250/- i.e. equal to pay

Rs.225/- in Challan and need to pay it before 10th May 2013.

Note: Rate is assumed to be 2%. Actual list of Rate will be declared soon.

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How to calculate LBT Payable

Gross Value of Goods Received/Purchased in Local Limits of PMC ………………..

Less:

1. Purchase from Local Dealers ……………….

2. Exempted Purchase (Tax free u/s 152Q) ……………….

3. Exempted for Govt Purchase (U/rule 28) ……………….

4. Value of goods imported for export out of PMC Limits ……………….

5. Goods Purchase Return within 6 months ……………….

Balance Purchase Turnover liable for LBT as per

Scheduled Entry Rate … ……………….

Please refer to Sch – A for rates of LBT commodity wise.

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How to Calculate LBT for Goods

imported for Process

Information regarding goods imported for Process

Rs.

a) Opening Stock ------------

b) Value of Goods imported for processing on

job work during half year -----------

c) Total Value ( a + b) -----------

d) Value of goods processed and Exported -----------

e) Closing Balance ( c- d) ----------

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Contact us

Above given information is for basic knowledge of LBT which will be applicable from 1st April 2013

For more information Please contact us :-

A.N.GAWADE & CO.

CHARTERED ACCOUNTANTS

Flat No.1 , Shreeshailya Apartment, Lane no.14, Prabhat Road , Pune-411004

Tel : 020 25459205

Cont. Person: 08983424134

Write us on : angawade@gmail.com

Visit us : www.angca.com

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