Maharashtra government on Monday said that it was firm on implementing Local Bodies Tax (LBT) and would not backtrack from it even as traders' bodies continued to oppose the new levy.

"It was after extensive deliberations that we decided to introduce LBT. The government is firm on it and will not backtrack," chief minister Prithviraj Chavan told reporters at Vidhan Bhawan.

He alleged that handful of people were misleading the small traders on the newly introduced tax.

About traders' demand to increase

VAT by one per cent instead of introducing LBT, he said that VAT is for the entire state. If a cess is charged on VAT, people from rural areas will also be affected.

Chavan while making a statement in the Legislative Council last month on LBT had said that the objective of introducing LBT in lieu of octroi was to make the municipal corporations financially stronger.

He had authorised the municipal corporations in the state to decide the rate of Local Bodies Tax.

LBT, facing opposition from traders, came into force in Nagpur, Pune, Pimpri-Chinchwad and Thane municipal areas on April 1. It is proposed to be introduced in Mumbai civic body from October.