Diamond octroi cut fills BMC’s coffers
The Brihanmumbai Municipal Corporation’s (BMC) decision to slash octroi on diamond import has proved to be beneficial to not just traders and importers but also to the BMC. Sujit Mahamulkar reports.mumbai Updated: Jul 11, 2011 00:59 IST
The Brihanmumbai Municipal Corporation’s (BMC) decision to slash octroi on diamond import has proved to be beneficial to not just traders and importers but also to the BMC.
The BMC had earlier this year reduced the octroi levied on diamonds from 2% to 0.01%. This move has achieved greater tax compliance on behalf of traders as well as a significant increase in the civic body’s revenues.
Over the last three months, since the octroi was reduced, the BMC has collected Rs2.41 crore as revenue from octroi on diamond import in the city. This is nearly equal to the entire revenue amount for last year, when the octroi was charged at 2%.
“The traders and importers were not willing to pay taxes and took every opportunity to evade or avoid octroi, due to the higher rate. Since it has been reduced, the revenue has increased significantly,” said SS Shinde, the joint municipal commissioner.
Seeing this positive trend, the civic body expects its annual tax revenues to go up to Rs9-10 crore for the entire year. “We are confident about achieving this target for diamond revenue,” said Shinde.
The decision to reduce the octroi ratio was taken following suggestions from the diamond and jewellery traders’ association Gems and Jewellery Export Promotion Council in the city. The council pointed out that many diamond traders were shifting to Surat where taxes were significantly lower. Following the demand, Shinde took a review and submitted a recommendation to reduce the octroi.
Scented sticks manufacturers and traders association have also joined the demand for reduction of octroi. At present, the octroi levied on scented sticks is 7%.