Maharashtra Orders Closure of LBT Departments in Municipal Corporations
Maharashtra Orders Closure of LBT Departments in Municipal Corporations
PMC yet to recover Rs 200 crore in dues
The Maharashtra government has ordered all municipal corporations to shut down their Local Body Tax (LBT) departments permanently. The decision comes years after LBT was abolished and replaced by the Goods and Services Tax (GST) in 2017.
The directive, issued by the Urban Development Department, will impact Pune Municipal Corporation (PMC), which still has pending LBT dues of ₹ 200 crore. PMC had continued its LBT department to recover outstanding dues. However, as per the order by Deputy Secretary, Urban Development Department Shrikant Andage, the department will cease operations from April 30, 2025.
Despite eight years since LBT was scrapped, PMC failed to recover the dues. The closure of the department without full recovery could strain PMC’s finances further. An activist suggested that PMC should request a one-year extension to complete the collections.
According to civic officials, PMC’s LBT department was still handling legal cases related to tax recovery. Around 125 cases are pending in various courts. Following the department’s closure, 34 staff members will be reassigned to other departments, with some already moved to the property tax division.
A senior PMC official said that after 2017, 34 villages were merged with PMC. It was expected that GST and stamp duty revenue from these areas would be given to PMC, but ₹350 crore is yet to be credited.
Earlier, octroi was PMC’s main income source. It was abolished in 2015 and replaced by LBT, which lasted only two years before GST was introduced. The government now compensates PMC through a monthly GST grant and one percent of stamp duty collected within city limits.
