Mumbai free of octroi after 52 years

Shiv Kumar

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Tribune News Service

Mumbai, July 1

For the first time in 52 years consignments moving by trucks and other commercial vehicles into Mumbai passed unhindered as octroi — a tax imposed by the Mumbai Municipal Corporation — stood abolished following the introduction of the Goods and Services Tax.

At the Dahisar check point in North Mumbai the sprawling octroi terminal wore a desolate look, as trucks, which waited earlier to get their consignments cleared by civic employees, zipped past.

“Everyone knows the octroi employees and the policemen on duty extorted money from truck drivers. Maybe they will find a new way to rob us in future, but today no one has bothered us,” Ramashankar Tiwari, who was delivering a consignment of iron rods for a
construction project in Mumbai, said.

Officially, the Brihanmumbai Municipal Corporation earned Rs 7,200 crore by way of octroi in the last financial year. However, said transporters, the official receipts were only a fraction of the money paid by them to octroi officials and police personnel to avoid
harassment. Crooked transporters also under declared the value of their consignment in order to avoid the civic tax, say traders in Mumbai.

The BMC collected octroi from five checkpoints at the entrance of Mumbai. Octroi accounted for 36 per cent of its receipts. 

The civic body, which provides a number of services ranging from bus services to
hospital care in Mumbai, has slashed its budget sharply in anticipation loss of revenue the move will cause.

Mumbai's Municipal Commissioner Ajoy Mehta said abolition of octroi has freed up 10 hectares of land where check posts were previously located.

“We are yet to decide how to commercially exploit the land,” Mehta told reporters on Saturday.

Abolishing octroi also renders 1400 BMC employees jobless. The civic administration says they will be absorbed in other departments.

The police department has however warned that unhindered entry of trucks could result in security issues. Police sources said they would heighten security at entry points into the city.