Maharashtra govt studies octroi replacement option

The minister of state for urban development, Rajesh Tope, has assured members of the Maharashtra State Octroi Abolition Committee, "the state government is studying the recommendations of the Subodh Kumar Committee, which suggests levying of additional tax under value added tax (VAT) system, while replacing octroi in a phase-wise manner."

He was addressing the meeting of traders and industrialists from the state organised by the committee, which has been convened by the Maharashtra Chamber Of Commerce and Industries.

He further said, half of the municipal corporations revenue, around Rs 5,572 crore, comes from octroi and it is not possible to abolish it unless a credible alternative is found, as abolishing the octroi will jeoparadise the revenues of the corporations.

However, the state is committed to abolish octroi at the earliest and find alternative methods for resource mobilisation of the municipal corporations. But most of the representatives attending the meet are opposed to the alternative to octroi as well as its step-by-step abolition.

Across the globe today, octroi is collected only in India and even in the country, only states like Maharashtra, Gujarat and Punjab follow this practice. Of these, the government of Punjab has declared that they will abolish octroi from first day of September, said Hemant Rathi, convener of the committee and chairman of the Maharashtra Chamber of Commerce and Industries.