Pune: Nearly 90,000 traders in Pune have not paid the local body tax (LBT) for the financial years 2015-16 and 2016-17 leading to a loss of nearly ₹120 crores to the civic exchequer.

The Pune municipal corporation (PMC) has now served notices to these dealers and has also directed nationalised banks to deduct ₹5,000 each from the accounts of these traders towards recovery of the pending tax.

“In the last three months we have served notices to 90,000 dealers in the city who have not paid the LBT. We had prepared a list of traders who have not submitted their LBT returns for the two consecutive financial years. We have verified all the details of these traders before serving the notices. Although the LBT was merged into the goods and services tax (GST), the dealers will still have to pay the pending amount under LBT which they have failed to pay,” Dnyaneshwar Molak, deputy commissioner, LBT, said in an interview. The civic body has also written to various nationalised banks to seize ₹5,000 from the accounts of the defaulting traders. “On our requests, the banks have already seized the amounts from the dealers’ accounts,” he said.

Based on Entry 52 of the State List under Schedule 7 of the Constitution, local body tax (LBT) is the tax imposed by the local civic bodies on the entry of goods into a local area for consumption, use or sale therein. The LBT was merged into GST last year and during 2017-18, the PMC generated ₹144 crores from LBT/GST, said Molak.

According to an official in the LBT department, about ₹120 crores will be collected from the defaulters. The civic officials said that since it is the state government which has the final authority to take action in this matter, traders often do not take municipal notices seriously. “However, the PMC has taken serious cognizance and will also be writing to the state government to assist in further course of action against the traders failing to pay the fine,” Molak said.

Dilip Kumbhojkar, president, Pune branch of Confederation of All India Traders (CAIT), said, “It is absolutely wrong to not abide by the rules and regulations. Ergo, there is nothing wrong with the civic authorities taking any disciplinary action against those who have not paid the LBT. The dealers must pay all the taxes. However, if found unjust, the dealers have the right to legally challenge the actions taken by the civic authorities.”

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