Pune: LBT Department Shutdown Mandated By State, PMC Yet To Recover Rs 200 Crore In Dues

Pune, 26th February 2025: The Maharashtra government has ordered all municipal corporations to permanently shut down their Local Body Tax (LBT) departments, years after the tax was abolished and replaced by the Goods and Services Tax (GST). The directive, issued by the Urban Development Department, is expected to financially impact Pune Municipal Corporation (PMC), which still has pending LBT dues amounting to ₹200 crore.

LBT was introduced as a replacement for octroi but was discontinued in July 2017 with the implementation of GST. However, PMC continued its LBT department to collect outstanding dues. With the new directive, the department will cease operations from 30th April 2025. The order, issued by Urban Development Department Deputy Secretary Shrikant Andage, mandates that all municipal corporations shut down their LBT divisions.

Despite eight years since LBT was scrapped, PMC made little effort to recover pending dues, resulting in a significant loss. The decision to close the department without fully collecting outstanding amounts could further strain the civic body’s finances.

Activist Vivek Velankar from Sajag Nagrik Manch criticized PMC’s inaction, stating, “The State Government’s order has effectively closed the chapter on LBT recovery. PMC neglected tax collection, anticipating the department’s closure. They should request a one-year extension from the state government to recover the dues.”