Meaning of Local Body Tax

Term Local Body Tax means

 

The details about Local Body Tax are explained here. 

Local body tax

Local Body Tax, popularly known by its abbreviation as LBT, is the tax imposed by the local civic bodies of India on the entry of goods into a local area for consumption, use or sale therein. The tax is imposed based on the Entry 52 of the State List from the Schedule VII of the Constitution of India which reads; "Taxes on the entry of goods into a local area for consumption, use or sale therein. "The tax is to be paid by the trader to the civic bodies and the rules and regulations of these vary amongst different States in India. The LBT is now partially abolished as of August 1, 2015.

Local body tax is an account-based cess collection for every raw material used or imported into the city’s limits by all businesses, traders and manufacturers. Local body tax is a levy that traders will have to pay the local municipal corporation for importing goods into the state.

LBT is an account-based cess collection for every raw material used or imported into the city’s limits by all businesses, traders and manufacturers. Once implemented, LBT will replace traditional octroi collections.

At present, octroi is paid by traders’ every time goods enter the city. This charge is applicable in certain states and varies from state to state.

All shopkeepers, who sell goods over a certain amount, will have to pay LBT. It will range from 0% to 7% and will be computed based on a trader’s turnover.

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