Traders who deal in liquor or substances made from liquor and whose annual turnover is less than Rs 50 crore will be levied sales tax equivalent to the LBT they paid previously.
Maharashtra government on Tuesday decided to impose sales tax on liquor manufacturers and traders having an annual turnover of less than Rs 50 crore, inviting criticism from retail traders. The decision was taken at a Cabinet meeting in Mumbai.
"The state government had to give subsidy to Municipal Corporations for the losses they suffered due to abolition of LBT (local body tax)," an official from Food, Civil Supplies and Consumer Affairs department said.
"It has now been decided that traders who deal in liquor or substances made from liquor and whose annual turnover is less than Rs 50 crore, will be levied sales tax equivalent to the LBT they paid previously," he added.
Slamming the decision, Viren Shah, President of Federation of Retail Traders Welfare Association (FRTWA), termed it as a "somersault" by the government. This amounts to bringing back LBT for small alcohol manufacturers, he said. "Earlier, LBT was imposed on manufacturers with over Rs 50 crore annual turnover, but now they decided to levy LBT on all alcohol trade."
"This is a somersault by the government. Right now it is only for alcohol, but other products may also be brought under its purview. Protests will erupt and blame will go to the government for putting burden back on traders," Shah said.
The BJP-led government abolished LBT for traders with a turnover of less than Rs 50 crore in 25 municipal corporations from August 1 last year. LBT is the tax imposed by the civic bodies on the entry of goods into a local area for consumption, use or sale.
According to government figures, the move gave relief to 8,08,391, or 99.05 per cent traders, in the state. Chief Minister Devendra Fadnavis had said in the Assembly that after scrapping LBT, the government will have to pay Rs 4,210 crore in grants from August 2015 to March 2016 period to civic bodies (to make up their loss).
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