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Municipal corporators from various civic bodies in Maharashtra have moved the Bombay High Court challenging the June 1 notification of the state government introducing local body tax on the entry of goods in the limits of cities in lieu of octroi.

Hearing one of the petitions on the issue, Justice Sharad Bobade and Justice Rajesh Ketkar last week granted a stay on recovery of local body tax for entry of goods in city limits of Nashik Municipal Corporation and also ordered continuation of octroi.

The judges asked the state’s Advocate General Darius Khambata to argue the matter on behalf of the state government as the Bombay Provincial Municipal Corporation Act has been challenged. The bench also allowed time to the state government till September 6 to file a reply.

However, hearing petitions filed by municipal corporators of Kolhapur, Kalyan-Dombivali, Ulhasnagar, Bhiwandi and Thane, on another occasion, the judges did not grant any stay, saying they would first hear the Advocate General before passing any interim orders. Octroi is a percentage tax levied on the entry of goods into the city, while local body tax is a lump-sum amount charged on the value of the goods.

While octroi is collected in cash on a daily basis, the local body tax is payable by the person within 40 days of bringing goods into the city. The government is favouring local body tax as it feels that this step would remove the rampant corruption prevailing in the state because there would be no need to employ contractors to collect octroi.

In the newly introduced local body tax, a lump sum amount has to be paid by the traders or the manufacturers or the owner of the goods within the specified time limit.

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4 Comments on "Maha corporators challenge local body tax"

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Saifee Dohadwala
Spare the whole sellers, Traders and Retailers from LBT. The traders are not opposed to pay their due taxes but are anguished at the policing that this LBT law will bring and encourage corruption and bureaucracy within the BMC. I am sure as CM – Maharashtra your good office would not want to see officers taking undue advantage from the traders community. Since 22 April 2013 the entire Nagdevi Street, Lohar Chawl, Metal Market etc have downed their shutters not even a single comment or a word of solace is coming from any of your departments worst even the media… Read more »

who all should apply for lbt number …they say its even for doctors .CA or any corporate offices which do not have trading activity …


why should we retailers have to say local body tax if our wholesalers are paying it?
why the lbt officers are harassing the retailers to pay some amount anyhow or else they will fine us .
i don’t think this is justice.
we want answer.

Dipesh Shah

Dear sir ,
I want to know about LBT of Bhiwandi Mulcipal Corporation, & when it will start