If state abolishes octroi, Pune Cantonment Board may also impose local body tax

The Pune Cantonment Board (PCB) may impose local body tax if the state government decides to abolish Octroi from April 2013. The issue was discussed at the recently held PCB general body meeting. At present, the board is having an Octroi-sharing arrangement with the Pune Municipal Corporation (PMC) and receives Rs 10 crore as revenue per annum.

The state government is reportedly abolishing Octroi with effect from April 1, 2013 and would allow municipal corporations to impose local body tax as a substitute.

"It is known that the civic body has still not finalised and approved concrete proposal to levy and collect local body tax. However, Kolhapur Municipal Corporation, Nashik Municipal Corporation and Aurangabad Municipal Corporation are imposing local body tax in their jurisdictions," the agenda of the meeting read.

The agenda further elaborated that the PCB office has approached PMC to inform about its decision on imposing the tax. "This office has already informed Municipal Commissioner of PMC about the steps being taken to levy local body tax. He has also been informed whether the board will be getting any compensation in lieu of the abolition of Octroi. His reply is still awaited," the agenda read.

As per section 66(2) of the Cantonments Act 2006, the board has the power to impose any tax which under any enactment for the time being in force may be imposed in any municipality in the state where the cantonment is set up.

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