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Maharashtra State Govt may abolish LBT on petrol and diesel

  • The state government is mulling abolishing local body tax (LBT) on petrol and diesel so that the cost of fuel within city limits and outside come on par.
  • The government will, however, levy another tax on fuel so that it does not incur loss of revenue. The collection from this tax will be same as that of LBT on petrol and diesel.
  • This move will reduce the prices of fuel inside municipal corporation limits but increase it outside. Nagpur Municipal Corporation (NMC) levies LBT on petrol and diesel at the rate of 3.5%.
  • Finance  minister Sudhir Mungantiwar, said the government would have to impose an alternate tax because it was not in a position to incur a loss of revenue to the tune of Rs 500 crore on account of abolition of LBT.
  • Over 99% traders are no longer paying LBT. However, it is still levied on fuel because the oil marketing companies HPCL, BPCL and IOC have a turnover of more than Rs 50 crore annually, the cut off limit for not paying the tax.

Source: TOI

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