Octroi evasion rackets bleeding civic coffers dry | mumbai | Hindustan Times
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Octroi evasion rackets bleeding civic coffers dry

mumbai Updated: May 10, 2013 01:26 IST
Kunal Purohit

Nearly two years ago, Juhu-based activist Utsal Karani decided to accompany a friend, who is a doctor, to the Airoli toll naka to pay octroi for medical instruments that she was importing.

"When we reached the toll naka, agents told us not to pay anything even as officials looked on. Many agents offered to help us evade the tax, but we persisted and paid nearly Rs4 lakh as octroi," said Karani.

Last week, civic law committee chairman Makarand Narwekar paid a surprise visit to the same octroi gate and found that eight trailers containing steel roads were allowed to go through without paying a single rupee.

These cases are symbolic of the way the civic body's premier income-churner, octroi, leaves the civic coffers bleeding because of immense collusion between agents, traders and errant officials.

Civic officials admit that introducing the local body tax (LBT) will mean that a major part of this evasion will end.

Due to lack of technology and supervision in the way civic officials collect octroi, various discrepancies in the collection system have gone unchecked.

In June 2011, the Brihanmumbai Municipal Corporation (BMC), on a pilot basis, set up an X-ray scanning van at the Sion-Panvel Highway Octroi naka. In the 10 days that the van was functional, the civic body collected an additional Rs50 lakh per day.

“Considering that there are many such octroi points, the amount being evaded each day is frightening,” said Narwekar.

Currently, the BMC is fighting a host of petitions filed by various companies that have been cheated by agents.

The agents took money to ostensibly pay the BMC as octroi, but never paid the amount and submitted fake receipts. Companies are alleging that that the agents acted in collusion with the BMC.

Narwekar, however, feels that abolishing octroi won't end the problem. “The BMC needs to continue imposing octroi, but after making drastic corrections in the system.”