Octroi tax compel traders to fight

The Vadodara traders have resolved to carry on their agitation against the continuation of octroi duties, even after implementation of VAT in Gujarat.

The Central Gujarat Chamber of Commerce (CGCC), a Vadodara-based traders' association, has organised a rally to protest octroi duty, on Monday.

Talking to media, at a press conference, Chetan Patel, president of CGCC, said, "The state should do way with the age old octroi tax, as it will be redundant after the implementation of VAT by April."

He further said VAT is implemented with an objective to collect taxes in one basket as well as to have a uniformity in tax collection system and product price.

According to him, the very purpose of the VAT will be defeated if the octroi tax, collected by the local bodies (municipality), continues even after VAT is implemented in the state.

The recent Vadodara Municipal Corporation (VMC) annual budget 2006-07 had made it clear from its budget document that the municipality had set a target of Rs 345.69 crore as income, of which, it will raise 58 per cent of its income through octroi collection.

Patel said, "VMC had collected Rs 159 crore as octroi tax in 2004-05 and for the current year, the octroi collection will cross Rs 200 crore."

He stated categorically that the octroi tax will ultimately harm the final consumer as, the traders pass on the tax burden on their customers.

He further informed, "Due to octroi tax, each Vadodarain had to cough out Rs 5330 per annum and this will be increased in the current year by Rs 6000 per annum."

He further added that with implementation of VAT, each family will have to give away Rs 6,000 per annum as VAT tax and if the octroi tax is not removed, then, the total tax paid by each family will be Rs 12,000 per annum.

Bharat Gupta, secretary of CGCC, said, "The city traders are not satisfied with the state government as, it had not fulfiled the promise of removing the octroi tax from all the cities of the state including Vadodara."

Giving the statistical data, he said that for collecting Rs 159 crore of octroi taxes, the municipality had spend Rs 4.5 crore as salary, which is a nonviable collection.

He said the high octroi charges had led many of the engineering and pharmaceutical companies to opt Vadodara out of their map.

On Monday, the CGCM will lead a protest rally against continuation of octroi tax.

The rally will begin from Race Course area and will conclude at the Collector's office at Kothi, where the traders' representative will submit a memorandum to the Vadodara district collector Rajiv Topno, demanding immediate termination to octroi tax from Vadodara.

Vadodara has 12,000 small and midium size traders and 62 small size traders association.

All the traders' associations had given their consent and will join the rally on Monday.