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Presentation on lbt (local body tax)

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  • Dear Sir,
    i have a question regarding leavy of LBT on builders and contractors... whether builders and contractors are different person in the context of lbt ???
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  • it is cost of purchase so inventory should be increased respectively
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  • Dear Mr. Anand,

    I have one question on LBT's impact on inventory valuation. Basically all are explaining about how to calculate LBT statement. But no one is talking about its inventory impact and account vouchers.
    Can you please through some light on it.

    Manish Pandya
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  • hello sir,

    would like to know the cancellation procedure as well
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  • thanks for ppt. Good info for all professionals. I am a doctor , can you please let me know if the same rules apply for doctors in Solapur?
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  • 1. LOCAL BODY TAX (LBT)LOCAL BODY TAX (LBT) (As applicable to Pune Municipal Corporation)(As applicable to Pune Municipal Corporation) PRESENTED BY A.N.GAWADE & CO CHARTERED ACCOUNTANTS (For Private Circulation only) Date: 12th July 2013. (Updated as per Amendments Notification dt. 20/06/13) 12/07/13 A N GAWADE & CO. 1
  • 2. Content ReferenceContent Reference 1. Applicability 2. Persons Covered 3. Rates Applicable 4. Registration Process 5. Registers to be Maintained 6. Consequences of Non Reg. 7. Periodicity of Returns 8. Period of Payment 9. Refund Process 10. LBT on Stock Transfer’s 11. Respective Forms 12. Example for reference 13. How to Calculate LBT 14. Contact Details  Slide No.3  Slide No. 4  Slide No. 5 & 6  Slide No. 7 & 8  Slide No.9  Slide No.10  Slide No.11  Slide No. 12 & 13  Slide No.14  Slide No. 15  Slide No. 16  Slide No. 17  Slide No. 18 & 19  Slide No. 20 12/07/13 A N GAWADE & CO. 2
  • 3. ApplicabilityApplicability  Applicable from 01/04/2013  Applicable to following types of trades 1. Importer ( Person importing goods from outside the Municipal Limits into Municipal Limits) a. In case of dealer, who is an importer and value of all goods imported by him during the year is not less than Rs.100000/- 2. In other cases a. Including the case where a dealer has not become liable to pay local body tax under clause above and turnover of all his sales or purchases during such year is not less than Rs.500000/- 3. If person carrying business in Local limits on Temporary basis . He is also required to take the registration under LBT. 12/07/13 A N GAWADE & CO. 3
  • 4. Persons CoveredPersons Covered-- BothVat and NonBothVat and Non--Vat DealersVat Dealers  All Proprietorships  All Partnerships  Companies, LLPs  Trusts  Service Industries such as Software Companies, CAs,Advocates, Hospitals, etc.  HUF,AOP, BOI  Govt. Departments who import goods for Profit. (Note:Applicable only if turnover criteria is satisfied.) 12/07/13 A N GAWADE & CO. 4
  • 5. Rates ApplicableRates Applicable  Turnover of Purchases and Applicable LBT a. 1 Lakh to 2 Lakh  Tax Rs. 4000/- b. 2 Lakh to 3 Lakh  Tax Rs. 6000/- c. 3 Lakh to 4 Lakh  Tax Rs. 8000/- d. 4 Lakh to 5 Lakh  Tax Rs. 10000/- e. 5 Lakh to 6 Lakh Tax Rs. 12000/- f. 6 Lakh to 7 Lakh Tax Rs. 14000/- g. 7 Lakh to 8 Lakh Tax Rs. 16000/- h. 8 Lakh to 9 Lakh Tax Rs. 18000/- i. 9 Lakh to 10 Lakh Tax Rs. 20000/- 10.Above Rs. 10 lakhs Rate is specified in Schedule A according to the goods.  Dealers opting for above scheme, NEED NOT to file returns . 12/07/13 A N GAWADE & CO. 5
  • 6. Rates Applicable for BuildersRates Applicable for Builders  Another alternative is available for builders and contractor who undertake the work of construction can pay LBT on lump sum basis in following way: a. Construction up to 4 floor  Rs. 100 per square meter. b. Construction up to 7 floor  Rs. 150 per square meter. c. Construction above 7 floor  Rs. 200 per square meter Any Developer or person undertaking any work within Municipality limits have an option of either paying LBT on value of goods imported into local limits. OR paying tax @ 0.25% of their total contract value.  For On Going Contracts as on 1.4.13, normal taxation (Commodity wise) is advised in absence of clarity. 12/07/13 A N GAWADE & CO. 6
  • 7. RegistrationRegistration  How to Register - Person registered under MVAT within Municipal jurisdiction is deemed to be registered under LBT- No need of separate registration under LBT. LBT Certificate will be issued directly without any procedure. However person who is registered under MVAT outside Municipal jurisdiction but carrying out business activities within Municipal jurisdiction required to get registered under LBT separately. - Every person to whom LBT is applicable is required to apply for registration within 30 days in Form A as issued by the State Govt for said purpose. 12/07/13 A N GAWADE & CO. 7
  • 8. Registration ProcessRegistration Process  Documents Required for Registration 1. PAN Card 2. Residence Proof of Dealer 3.Address proof of Place of Business 4.Copy of Shop Act Shop Act License 5.Copy ofVAT registration Certificate 6.2 Photographs of Dealer /Authorized Person 7. In case of Company or Partnership Firm, names of partners and directors are to be mentioned in the form and affidavit shall be submitted within 3 months from the date of application. Note: The process of registration will start online from 15th March 2013. And documents are need to be submitted at Octroi Dept Near PMC. 12/07/13 A N GAWADE & CO. 8
  • 9. Register to be MaintainedRegister to be Maintained  Every trader to whom LBT is applicable is required to maintain following details as required by State Government in Form D also required other details 1. Name and Address of theVendor 2.Vendors LBT Reg. No. 3. Commodity 4. PurchaseValue of Goods/ Processing Charges 5.LBT Payable Form D (purchases and receipt of goods Register)can be maintained in Computerized format. Dealer maintaining register in Computerized format is required to produce documents maintained underVAT on demand to Commissioner. Note- 1. Register should be chronologically maintained 2. Entry of goods to be as per date of receipt in City 3. Incorporate the details of purchase/import viz- a. Invoice No and Date b. Name and Address of selling dealer c. Local RD and RC no. (If any) Else place from where goods are moved for sale by selling dealer d. Purchase price in case of Branch transfer i.e.Value of Goods. 12/07/13 A N GAWADE & CO. 9
  • 10. Consequences of Non registrationConsequences of Non registration 1.For non registration of a person or 2. Person who is not registered but showing as registered 3.Submitting falsified returns 4.Submitting falsified documents for registration 5.Providing incorrect information in accounts 6.And person who trying to evade tax, etc. - will be liable for a penalties from one times to five times of the amount involved. 12/07/13 A N GAWADE & CO. 10
  • 11. Periodicity for Annual ReturnPeriodicity for Annual Return  Every person to whom LBT is applicable is required to submit only Annual Return in Form E II for the year. Even if it is nil tax liability. Penalty for non filling of Return penalty is Rs.5000/- per return. Form Date of Filling Return 1. Form E-II  Within 90 days fromYear End i.e. E-II need to be filled within 90 days from end of FinancialYear . Earlier provision of half yearly return is removed. 12/07/13 A N GAWADE & CO. 11
  • 12. Period of PaymentPeriod of Payment  Every person to whom LBT is applicable is required to pay LBT every month.  Interest for late payment will be @ 2% per month. Month  Date of Payment 1.April  20th May 2. May  20th June 3. June  20th July 4. July  20th August 5.August  20th Sept. 6. Sept  20th Oct 7. Oct  20th Nov 8. Nov  20th Dec 9. Dec  20th Jan 10.Jan  20th Feb 11.Feb  20th March 12.March  20th April 12/07/13 A N GAWADE & CO. 12
  • 13. Period of PaymentPeriod of Payment  Registered dealer whose turnover of all purchases is less than Rs. 10 lakhs can opt for a payment of lump sum amount of LBT subject to condition specified in Rule 27. Persons opting for such scheme are not required to file Returns.  For this facility person is required to furnish a declaration in Form R to Commissioner. 12/07/13 A N GAWADE & CO. 13
  • 14. Refund of LBTRefund of LBT  In case of excess payment of LBT trader required to apply for refund .  In one month LBT application will be processed and within one month refund will be issued.  If it is not issued within two month from date of application , refund will be issued with interest .  90% of the eligible amount will be refunded in case of Export of Goods.  For regular exporter option of payment of LBT @10% of applicable rate.  Goods Imported and exported in same calendar month shall be eligible for set- off of refund due in next month’s liability. Eg. 1.Date of Application for refund : 01/04/2013 2. Date of Process of Application : before 30/04/2013 3. Date of Issue of Refund : before 31/05/2013 4. Not issued before 31/05/2013 : Interest from 31/05/2013 will be issued. 12/07/13 A N GAWADE & CO. 14
  • 15. LBT on Stock TransferLBT on Stock Transfer  LBT is payable on all imports into particular city limits. Following are instances where LBT will be applicable: 1. Replacement of products under warrantee in another city limit. -LBT will be payable in that City Limit. 2. Taking back old parts for repairs- LBT will be payable in City Limit where it is imported. 3. Importing of goods in City limit for some function or sports activity or presentations even for a day will attract LBT. 4. Office of the Dealer is in City and Godown is outside, then when goods are taken in City Limits, LBT will be applicable. 5. Goods imported and re-exported within 6 months will be eligible for refund upto 90% of LBT Paid.To claim LBT refund, you must pay first. 6. Machines like tea dispensers installed free in the Office, may attract LBT, if imported from outside city. 7. Companies providing various maintenance services in multiple cities, may have to pay LBT in such Cities if it is importing goods in such cities. 12/07/13 A N GAWADE & CO. 15
  • 16. Respective formsRespective forms  Form A  Application for Registration  Form D  Purchase Register or Register of Goods  Form E II Form of Annual Return.  Form R  Declaration for permission to pay lump sum amount of LBT. 12/07/13 A N GAWADE & CO. 16
  • 17. Example with Calculation (LBT isExample with Calculation (LBT is applicable on all taxes as well)applicable on all taxes as well)  For Example Goods imported into PMC limits worth Rs. 10000/- as on 15th April 2013 (ApplicableVAT Rate – 12.5% and LBT- 2%) Value of Goods Rs. 10000/- Add:VAT @ 12.5% Rs. 1250/- ----------------------------- Sub-Total Rs.11250/- Purchaser is required to pay LBT @ 2% on Rs.11250/- i.e. equal to pay Rs.225/- in Challan and need to pay it before 20th May 2013. Note: Rate is assumed to be 2%. Actual list of Rate will be declared soon. 12/07/13 A N GAWADE & CO. 17
  • 18. How to calculate LBT PayableHow to calculate LBT Payable  GrossValue of Goods Received/Purchased in Local Limits of PMC ……………….. Less: 1. Purchase from Local Dealers ………………. 2. Exempted Purchase (Tax free u/s 152Q) ………………. 3. Exempted for Govt Purchase (U/rule 28) ………………. 4. Value of goods imported for export out of PMC Limits ………………. 5. Goods Purchase Return within 6 months ………………. Balance PurchaseTurnover liable for LBT as per Scheduled Entry Rate … ………………. Please refer to Sch – A for rates of LBT commodity wise. 12/07/13 A N GAWADE & CO. 18
  • 19. How to Calculate LBT for GoodsHow to Calculate LBT for Goods imported for Processimported for Process Information regarding goods imported for Process Rs. a) Opening Stock ------------ b)Value of Goods imported for processing on job work during half year ----------- c)TotalValue ( a + b) ----------- d)Value of goods processed and Exported ----------- e) Closing Balance ( c- d) ---------- 12/07/13 A N GAWADE & CO. 19
  • 20. Contact usContact us  Above given information is for basic knowledge of LBT which will be applicable from 1st April 2013  For more information Please contact us :- A.N.GAWADE & CO. CHARTERED ACCOUNTANTS Flat No.1 , Shreeshailya Apartment,Lane no.14,Prabhat Road , Pune-411004 Tel : 020 25421093 Cont. Person: 09822348948 Write us on : angawade@gmail.com Visit us : www.angca.com 12/07/13 A N GAWADE & CO. 20