—CT News Bureau

Mumbai, March 18: Giving a big relief and responding to long pending demand of local traders of Maharashtra, the state government has decided to abolish the Local Body Tax (LBT) from August 1.

Sudhir Mungantiwar, The Finance Minister, made this announcement in his Budget speech. In lieu of LBT, rate of VAT would be marginally increased, according to Business Line. However, the Octroi collection of Greater Mumbai Corporration will remain unchanged.

He said the municipalities in the State, who will lose revenue, would be given a compensation of Rs. 6,875 crore by the State Government.

LBT was introduced by the previous Congress-NCP government with a view to replace octroi. The trader community opposed the new tax because of the complicated procedure and paperwork it entailed.