It’s a tax that traders will pay the local civic body for importing goods into the city. Sounds similar to octroi? Octroi, abolished in almost all municipalities in state, is paid every time a consignment enters the city, at octroi nakas. LBT attempts to speed up goods movement, stressing self-declaration of goods by traders who will maintain LBT accounts.
But why are they protesting if LBT is merely replacing octroi?
The traders’ contention is that octroi abolition and imposition of LBT simultaneously is a betrayal. With VAT in place across the country, a double-tax regime is not acceptable, they say. Prices of goods are affected by VAT as well as by state or municipality-level taxes. Also, complying with various rules on self-declaration, record maintenance, account books, etc. could be an added cost under the LBT regime. Government sources say tax evasion under the octroi regime was simpler, another reason traders are opposing LBT.