With a strong opposition from traders in Mumbai to the LBT and apathy within the civic administration continuation of octroi in Mumbai is sure. Other 25 corporations which have adopted LBT and earning better revenue can also take a call.
Government, however, has reportedly made it clear that it would not give guarantee in case of losses while implementing either of the systems as achieving better revenue targets would also remain the priority.
Earlier maharashtra government was actively considering to abolish local body tax (LBT) and octroi in the state and putting in their place a 2.5-3% surcharge on value added tax (VAT).
LBT is the tax imposed by local municipal bodies on the entry of goods into a "local area for consumption, use or sale therein". Barring in Mumbai, LBT has replaced octroi across Maharashtra. The state is projected to earn about Rs 14,000 crore through LBT in the current financial year. Its revenue from VAT, meanwhile, is reported to be close to Rs 60,000 crore.
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