Octroi target scaled up by Rs 840 crore

Even as abolishing octroi is a matter of debate at the state level, the civic administration has started experimenting with different avenues for tax collection. BMC increased its octroi target by a whopping Rs 840 crore for the next fiscal. The civic body has planned to replace octroi, its biggest money spinner, with Local Body Tax (LBT) from October.

While octroi is levied on goods at entry points in the city and is collected in cash daily, LBT is a lumpsum amount charged on value of the goods. LBT is payable within 40 days of bringing goods into the city.

BMC chief Sitaram Kunte said in his budget speech, "This reform will boost the city's friendly image and remove the bottlenecks associated with the present methods of octroi collection, thereby improving efficiency in movement of goods."

While octroi is charged every time goods are brought into the city, LBT is account-based, wherein traders and businessmen will be responsible for monthly payment of tax by way of self declaration.

"Though LBT is not enforced directly and is collected through self declaration from traders, there are stringent laws and we will ensure that there is no evasion," said Kunte. The civic body expects to earn Rs 7,700 crore through octroi collection in 2013-14.

The BMC has initiated a study with the help of Mumbai University's department of economics and Tata Institute of Social Sciences to help implement the new tax system effectively. The civic administration is also planning to involve all stakeholders in the consultation process before implementing it.

In yet another attempt to reform the tax system, the BMC has also decided to facilitate self assessment of property tax and help citizens work out their own property tax and file returns.

ALSO READ

Govt aims to bring down CAD to 2.5% by 12th Plan-end, says Montek

Raghuram Rajan not in favour of sovereign bond to finance CAD

Hospitality sector attracts $3.2 bn FDI in Apr-Feb FY13

India for enhancing financial resources of ADB