The trade shutdown called by Federation of Associations of Maharashtra (FAM) against local Body Tax (lBT) fizzled out during the weekend, as retailer traders backed out of the week-old agitation and reopened their shops in Mumbai and other major cities in the State.
Mumbaikars and their counterparts in major cities across the State heaved a sigh of relief, as shops, hotels and other business establishments reopened in many parts of the city and elsewhere in the State on Sunday, after nearly a week during which most establishments remained closed much to the annoyance of the people.
The retail shopkeepers in Mumbai and other cities of the State resumed work, after the Federation of Retail Traders’ Welfare Association (FRTWA) called off the agitation on the eve of Ashyay Tritiya festival scheduled for Monday.
The FRTWA decided to back out of the bandh called by FAM, after it realised that the Congress-led DF Government would not shelve the implementation of the levy of lBT in 24 municipal corporation areas in the State, even if the FAM continued its bandh for a long period — a fact that became clear after the Supreme Court on Friday rejected the trade federal body’s plea seeking a stay on the levy of new local tax.
The Congress-led DF Government decided to scrap Octroi and replace it with lBT in 24 municipal corporations in the State with effect from April 1.
While the lBT has already been introduced in 20 municipal corporations in the State, the new tax is expected to replace octroi in Mumbai and three other cities from October 1.
Another reason behind FRTWA deciding to call off the agitation was that a majority of the retailers — with their having already suffered huge losses during the week-long closure of shops — were in no mood to continue the agitation, just to satiate the wholesalers’ lobby in the FAM which is bent on carrying with the agitation.
After the retailers called off their agitation, the FAM put up a brave face on Sunday, maintaining that the wholesalers in the metropolis would continue bandh irrespective of the lack of support from FRTWA.
“Despite a section of the retailers calling off the strike, wholesalers’ strike against lBT will continue,” Federation of Associations of Maharashtra President Mohan Gurnani said in a statement here.
In no mood to succumb to immense pressure brought to bear on it by the FAM, the Maharashtra government has made it clear to the traders across the state that it would go ahead with its plans to levy lBT in Mumbai and elsewhere in the state.
Chief Minister Prithviraj Chavan has, however, offered to look into the grievances of the trade bodies. For the purpose, he has appointed a 15-member high-level committee of bureaucrats, headed by State chief secretary Jayant Kumar Banthia to seek suggestions from the trade bodies for implementation of lBT in Mumbai.
Among other things, the State Government has offered to consider increasing the exemption limit for traders in Mumbai to Rs 5 lakh.
Meanwhile, the chief minister has also written letters to all MPs and legislators from the state, justifying the need for replacing octroi with lBT. He has told them that octroi is regressive tax, it impedes free flow of goods into cities and the octroi collection system is ridden with corruption and leakage of revenue.
According to Chavan, the decision to replace octroi with lBT has not been taken in haste and that a lot of thought had go into the decision. The state government had in 2009 approved a resolution deciding to replace octroi with lBT and it had initially been decided to implement in five big cities like Mumbai, Pune, Pimpri-Chinchwad, Nagpur and Thane.
“Unlike in the case of octroi which is collected at the time of bringing in the goods into a city, lBT is collected from traders a month later. As a result, traders can utlise or divert the tax amount due for some other purpose for a month,” Chavan said.
Chavan’s letter to MPs and legislators in the state comes in the wake of submission a memorandum submitted by 18 Congress MPs from the state to AICC president Sonia Gandhi on Thursday, requesting her to intervene and prevail upon the Maharashtra chief minister to find a solution to the “tremendous opposition” from the trading community to the lBT in the state.
In their memorandum, the Congress MPs, led by Gurudas Kamat and Vilas Muttemwar, had told their party president that while they were not in favour of the re-introduction of “corruption-ridden” octroi, they were all for an “amicable solution” that would benefit traders, municipal corporations and the DF Government.