Mumbai octroi evasion racket busted: Tax collection up Rs 5 cr daily

  • Aritra Hazra, Hindustan Times, Mumbai
  • Updated: Sep 09, 2015 12:31 IST

After the Sewri police recently busted an octroi evasion racket and Maharashtra chief minister Devendra Fadnavis instructed police commissioner Rakesh Maria to crack down on it, tax collection from check posts has gone up by Rs 5 crore per day.

“The octroi collection on an average has gone up by Rs 5 crore every day, combining the tax from each naka. We have beefed up security and now have our own security system, instead of leaving it to a private agency,” said Milind Sawant, deputy municipal commissioner. Rajendra Trivedi, senior inspector, Sewree police station, who led the drive against the racket, said if the octroi collection is increased, the excise and sales tax collection will also go up, resulting in more money flowing into the state’s coffers.

“There are loopholes still at the Bandra terminus and the Mumbai central railway station, where octroi is not being paid. We need to tighten security there. If the BMC tries, the figure can get go up to double the amount being collected currently,” said Trivedi.

The racket came to light in August, after the Sewri police arrested four unauthorised agents.

Read: Mumbai octroi evasion racket: Probe reveals ‘deep nexus’

Read: Sewri police probe multi-crore Octroi evasion racket, four held

Investigations revealed it was being run by an intricate syndicate of officials of the BMC, politicians and underworld gangsters such Chota Rajan, Arun Gawli and Ashwin Naik.

So strong was the nexus that honest octroi officials were forced to keep mum and let the scam perpetuate, fearing threats to their lives.

After this, chief minister Devendra Fadnavis instructed Maria to form a task force and put a stop to the irregularity.

Read: Octroi-evasion racket: Fadnavis directs top cop to form task force

The probe also revealed the BMC’s octroi department had not hired any authorised agents or updated the tariff card for the past 10 years, though the prices of goods have increased manifold.

Police sources said that underworld gangs allocated a certain number of vehicles at each octroicheckpoint in Vashi, Mulund and Dahisar, and operate in association with transporters under their domain.

Read: Corrupt BMC staff responsible for octroi evasion scam: Ex-vigilance chief

Probe opens can of worms
* While investigating the racket, the police found that various underworld figures, including Chhota Rajan, Arun Gawli and Ashwin Naik, are involved.

* Honest officials and the octroi and vigilance departments do not speak up or take action owing to pressure from politicians and threats from underworld gangs.

* More than one political party is believed to be involved.

* The police are trying to determine the total loss incurred by the state from the racket.

* No authorized octroi agent has been appointed since 2006.

* The tariff card has also not been updated for the past 10 years, though the prices of goods have increased manifold.

* Some vehicles involved in the scam have been blacklisted by the BMC.

How octroi was evaded
* Companies sending the goods contact the transporter to evade octroi.

* The transporter meets the unauthorised agent and makes a deal.

* The driver of the vehicle is given a letter that is shown to the agent at the check naka.

* The agent produces a bogus receipt that understates the quantity of goods

* The driver is given a slip on which ‘Saheb’ is written. This is what has led the police to suspect that politicians are involved.

* The slip is then shown to vigilance officers if and when they stop the truck.

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