CII upset over Maharashtra not scrapping octroi tax

March 21st, 2008 - 12:17 am ICT by admin  


Pune, March 20 (IANS) The Maharashtra government’s decision to continue with octroi tax in all its major cities including Mumbai, Pune and Nagpur has upset the Confederation of Indian Industry (CII). According to Pradeep Bhargava, the recently-elected chairman of CII, “Maharashtra Finance Minister Jayanrao Patil’s announcement to replace the octroi in D-Class cities with account-based levy doesn’t solve any problem.

“Octroi is not a very friendly system of levying tax and the chief minister has been telling us for so long that it will go away, it causes traffic problems, harassments.”

The frustration of the industry stems from the fact that Maharashtra is the only state in the country to continue with octroi tax.

“On one hand we talk about seamless globalization and on the other hand we levy such taxes,” said Bhargava.

“The industry however understands octroi is one of the major source of revenue for the municipal corporations. So the industry wants the government to replace it with an account based system wherein taxes can be filed the way it is done for sales and income tax.”

In Pune, a three percent octroi tax nets the Pune Municipal Corporation a whopping Rs.7 billion annually while the collections in Mumbai and Thane are even more.

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