It’s an unusual sight at the Octroi Check Naka in Vashi, a suburb located on the Mumbai city limits. There is no long, winding line of trucks. Not one.
Instead, trucks laden with goods are driving into the city without having to stop to pay octroi levied by the Brihanmumbai Municipal Corporation.
The implementation of a Goods and Services Tax has led to the scrapping of octroi - an tax levied by local governments at the point of entry of goods - across the country.
Truckers that BloombergQuint spoke to at the Vashi Check Naka are a happy lot as they no longer have to deal with the endless paperwork and delays that came to be associated with octroi.
But a few truckers are in a curious fix. They entered the city late Friday night before GST came into effect and had to queue up to pay octroi. They weren’t able to clear the post before the entry tax was scrapped and are now stuck with no solution in sight. Officials at the entry point told BloombergQuint that it isn’t clear if these trucks would have to pay octroi or not.
The BMC has been levying octroi for the past 52 years, since 1965.
Mumbai has five road entry points where the tax was collected. The BMC also collected tax on goods coming in through the airport, railway stations and harbours.
But the country's richest civic body is not too worried about the revenue loss as it expects to be compensated for the shortfall. Maharashtra Finance Minister Sudhir Mungantiwar told BloombergQuint that the BMC will receive a cheque from the government on the fifth of every month making up for the shortfall in revenue.
The corporation will have to find new roles for around 1,000 employees who worked as octroi agents. The BMC will not lay off any employee, said the BMC official quoted above.
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