IAS OUR DREAM

Tuesday, May 14, 2013

Local Body Tax - LBT - deciphered ! ( Maharashtra )

What is LBT?

LBT stands for Local Body Tax, which has been introduced in most of the municipalities and corporations in Maharashtra, in lieu of Octroi or Cess.
It is a levy under entry 52 in the State list of Schedule VII of the Constitution of India, on the entry of goods into a city limits for the purpose of consumption, use or sale therein.
Thus, the recent agitations against LBT, a levy, which is constitutionally valid, have given rise to questions as to the root cause of the agitations.

Then what is OCTROI ?

Octroi is a levy which was prevalent in Roman times.
It was extensively used as a tax tool in Europe till World War II.
Now, it is almost extinct except in Ethiopia and Maharashtra (a true reflection of comparable development of the economy or the situations of drought).
Other states in India have done away with this levy and they share a portion of the Value Added Tax (VAT) or Sales Tax (ST) with the local bodies.

How does LBT work?

It works differently from the octroi system.
Traders have to compile a list of all goods procured within the month, feed the matter into the software provided by the civic body to check their LBT liability.
They have to make payment once every 40 days using online portals, cheque, demand draft or cash through a designated bank or counters of the civic bodies.

Significance of LBT

LBT will be the main source of income for civic bodies.
It contributes between 50-70 per cent of the actual revenues of the corporation.
The Pune Municipal Corporation collected Rs 1314.27 crores by way of octroi for the financial year 2012-2013, while the Pimpri Chinchwad Municipal Corporation collected Rs 1200 crores in the last financial year.

But why are they protesting if LBT is

merely replacing octroi?

The traders’ contention is that octroi abolition and imposition of LBT simultaneously is a betrayal.
With VAT in place across the country, a double-tax regime is not acceptable, they say.
Prices of goods are affected by VAT as well as by state or municipality-level taxes.
Also, complying with various rules on self-declaration, record maintenance, account books, etc could be an added cost under the LBT regime.
Government sources say tax evasion under the octroi regime was simpler, another reason traders are opposing LBT.

Have all Maharashtra municipalities

imposed the tax?

Out of the 26 corporations, 24 have migrated to LBT. Mumbai and Nashik will do so later this year.

SC verdict on LBT ?

a writ was filed by Federation of Trade Associations of Pune (FTAP) in Supreme Court (SC) against the state government decision to replace octroi with LBT.

SC refused to impose a stay on the Govt decision !!!!

Why some people call it darconian ?points against it ?

LBT is a draconian Act, especially with key words like ‘goods’, ‘dealer’, ‘business’ loosely defined in the legislation, giving enough scope for the administrators to stretch their imagination to fanciful limits to the common man’s harassment and dismay.
The Bombay Provincial Municipal Corporations Act, 1949, the Act that gives right to levy LBT, as such does not have a penalty-limit prescribed for any violations relating to LBT, though there is an elaborate Annexure prescribing the various penalties. That shows that penalty cannot be levied legally.
However, the Rule 48 framed under this Act, quantifies the penalty that can be levied in different cases. Thus, the said Rule is ultra vires the Act.
Another point against LBT is the cascading effect of teh Tax. Unlike excise or service tax or VAT, there is no concept of set-off or input credit.
Another reason against LBT is that there is no time-limit that is specified for completing the assessment of the firms. In such situations, the dealers may be kept in suspense as to their liability to maintain books and records.
The Act is not a comprehensive Act that is well worded or suited for taxation.

A possible solution to this fiasco ????

They should bring in the changes in legislation to repeal LBT and make suitable changes in VAT so that the local bodies do share revenues the state government derives from VAT.

This will ensure that the administration frees itself from the task of collection of addition tax and other related administrative work. This will also help the dealers of additional hassles of payment of tax, filing of return, surveys, raids, check posts, assessments, appeals etc. and also dealing with one more Government body prone to corruption.

Saturday, May 11, 2013

SRI AUROBINDO -- Vyakti Vishesh

SRI AUROBINDO - WHO SAW THE FUTURE OF MAN*

Sri Aurobindo, a flaming revolutionary and prophet of Indian nationalism, poet and a Rishi, the was also a philosopher of tremendous power with a world-view astounding in its profoundity.Aurobindo was indeed a unique personality.

His magnificent intellect and his yogic experiences combined to produce a number of remarkable works in prose and poetry which are becoming increasingly relevant as the century moves towards its close.

Early Years

Sri Aurobindo was born on 15 August 1872, in a very anglicised Bengali family of Calcutta. His father had an aversion to everything Indian. At the age of 5, he was admitted to an Irish nun's school at Darjeeling. Two years later he was taken to England in the care of a clergyman with strict instructions that he should not be allowed to make acquaintance of any Indian or be exposed to any Indian influence.
At the tender age of 12, he had read Homer, Aristophenes, Dante, Goethe and French poets. Indeed he ranged over the whole field of European thought.
But as his father had run out of funds and Aurobindo's scholarships could hardly support him, he entered into the ICS.
But even with its tangible material rewards and prestige of belonging to the ruling class, its charm wore off while he was still undergoing his probation. But he knew if he resigned straightaway, it would break his father's heart. So he sought a way out and purposely failed to appear for the compulsory riding test and so was disqualified for the ICS.

He had realised by then, that his real interest is in poetry and literature and patriotic action. The days of King's College had sowed the seeds of patriotism in him. Although he liked English literature, but disliked English rule.

A New Direction

After returning to India, while he was with Baroda State Service, he took little interest in the politics. During this lean period of his life, he learnt many Indian languages including Bengali, his mother tongue, for which he was alien hitherto. It was during his visit to Bengal that his mind shook to the core to notice the cynicism of the middle classes, whose only aim in life seemed to be `the happiness of the relatives and the family'.
In the beginning, he could do nothing more than establishing contacts with the underground revolutionaries in Maharashtra and Bengal. These dangerous forays gave him some satisfaction.
But the real change came in 1905 in the wake of the partition of Bengal. His scene of activity shifted from Baroda to Calcutta.
His articles in his own Bengali paper Yugantar and Bipin Chandra Pal's Bande Mataram expounded the philosophy of Indian nationalism with a daring sharpness and eloquence.
He ridiculed the ideal of colonial self-government as a political monstrosity, and propagated that the only ideal which India could accept was `absolute autonomy, an unqualified swaraj'.

Inspirational Prose

His prose was like a heady wine to the young radicals of Bengal.
He organised nationalists in Bengal Congress and promoted their alliance with the extremists of Maharashtra led by Tilak.
He gave a coherent and militant ideology to the agitation against the partition of Bengal. His activities earned him the implacable hostility of the British authorities.
Aurobindo was prosecuted twice first in 1907 and again in 1908-09.
In the latter prosecution he was one of the accused in the Maniktola Bomb conspiracy case but he was acquitted after a magnificent defence by Chittaranjan Das.

Sri Aurobindo resumed his political activities. But after a few months he suddenly withdrew from the Indian political stage leaving surprised his friends and foes alike.

In February 1910, he left for French settlement of Chander Nagar and then moved on to Pondicherry, where he spent the next 40 years.

Spritual Odyssey

He explains his sudden exit from politics that he got a very distinct 'adesh' (command) in this matter. "Before I cut connections entirely with politics, I knew from within that the work I had begun there was destined to be carried forward and that the ultimate triumph of the movement I had initiated was sure without my personal action or presence."
His spiritual odyssey transformed his way of looking at the world. He was no longer prepared to condone violence for political or indeed for any ends.

At Pondicherry, he wrote vigorously. The `Synthesis of Yoga', the `Essays on the Gita', the `Secret of the Veda' and the `Human Cycle' are some eloquent testaments of his profound insights into life and reality. His writings are affirmations of spiritual truths and values. He found resort in Yoga - renunciation of ego and acceptance of God in life.

November 24, 1926 is the day of founding of Sri Aurobindo Ashram.

The `Mother', his associate, was the incharge of the community of Sadhaks that had been growing steadily around Sri Aurobindo and this spiritual collectivity made way for the Sri Aurobindo Ashram.
In the beginning, children or families were not admitted to the Ashram.
After the outbreak of the War, however, a large number of devotees sought refuge in the Ashram with their families. The Mother could not refuse them.
Later it became unavoidable to start a school for children in 1943 which developed into the present Sri Aurobindo International Centre of Education, where Aurobindo's ideals and Mother's philosophy of education are being worked out.

In the beginning of 1950, Aurobindo started losing interest in his body and symptoms of the uraemia started to appear. He refused to intervene and let things take their course. Finally his soul left his mortal body on December 5, 1950.

Vision for a Free India

Sri Aurobindo was a man with a world-view. He saw the Independence of India as a phenomenon with a universal implication. In a free India, lied a whole new horizon for the world to be explored.
On this day, his words were - "August 15th, 1947 is the birthday of free India, it marks for her the end of an old era, the beginning of a new age. But we can also make it by our life and acts as a free nation an important date in a new age opening for the whole world, for the political, social, cultural and spiritual future of humanity.
"August 15th is my own birthday and it is naturally gratifying to me that it should have assumed this vast significance.... Indeed, on this day I can watch almost all the world-movements which I hoped to see fulfilled in my lifetime, though then they looked like impracticable dream, arriving at a fruition or on their way to achievement. In all these movements free India may well play a large part and take a leading position.

"The first of these dreams was a revolutionary movement which would create a free and united India. India today is free but she has not achieved unity...
"Another dream was for the resurgence and liberation of the peoples of Asia and her return to her great role in the progress of human civilisation...
"The third dream was a world-union forming the basis of a fairer, brighter and nobler life for all mankind....

A new spirit of oneness will take hold of the human race.

"Another dream, the spiritual gift of India to the world, has already begun....
"The final dream was a step in evolution which would raise man to a higher and larger consciousness and begin the solution of the problems which have perplexed and vexed him since he first began to think and to dream of individual perfection and a perfect society......

Here too, if this evolution is to take place, since it must proceed through a growth of the spirit and the inner consciousness, the initiative can come from India and, although the scope must be universal, the central movement may be hers....

"Such is the content which I put into this date of India's liberation; whether or how far this hope will be justified depends upon the new and free India."