Maharashtra traders plan indefinite strike over new tax

Traders in Maharashtra, unhappy with the state government's decision to levy a local body tax (LBT) in parts of the state, are going to intensify their agitation, culminating in an indefinite strike from 22 April 22.

This was decided by the Federation of Associations of Maharashtra (FAM), which represents about 750 trade associations of Maharashtra, at a meeting held in Mumbai on Monday.

Mohan Gurnani, president, FAM, hinted that the indefinite bandh would continue till the government resolved the issues faced by the trading community. He also asked traders to vote only for a pro-trader political party in the next election in 2014. According to him, one trader can on an average influence 200 votes.

The new tax has already been imposed as a replacement for octroi in various municipal areas of Maharashtra, including Navi Mumbai, Kolhapur, Sholapur and Vasai-Virar, from 1 April.

Traders in these areas would now have to obtain registration numbers and will be served with a three-day notice to pay LBT on the monthly turnover of the sales of goods in the local area along with interest and late fee.

Through the notice, the traders were threatened with penal action, including two years' imprisonment if they fail to pay the dues.

At the meeting, the traders strongly opposed both LBT (which will be imposed in Mumbai from 1 October and octroi duty. Now, the FAM action committee is planning a trade bandh across the state. A decision on this will be announced at the next public meeting, which is likely to held in about a week's time.

The traders have decided to oppose the present form of local body tax, claiming that it is totally at variance with the draft that was submitted by FAM and other chambers of commerce. An appeal was made to the state government to keep the implementation of LBT in abeyance till the matter is discussed with the trading community and a consensus is arrived at.

Surendra T Savai, executive president, FAM, said, ''LBT is one of the reasons for present inflation, therefore states should avoid levying such local taxes. Otherwise this draconian provision (only in Maharashtra) will tremendously increase the price rise, corruption and harassment of traders by government officials. Thus, traders in Maharashtra have already started shifting to the neighbouring state (Gujarat), where state government policies are pro-trader.''

He added, ''There are a number of issues like value-added tax (VAT) refunds; other problems related to VAT; the Food Safety and Standards Act (FSSA), 2006; seizure of foodgrains, foreign direct investment in retail, and the Shops and Establishment Act, which are still unresolved. Now the government has suddenly decided to impose LBT on the trading community and professionals in Maharashtra without taking them in confidence. This is like adding fuel to the fire.''