Gujarat to abolish octroi from Nov

The Gujarat Government today took an in-principle decision to abolish octroi from seven larger municipal corporation limits in the State from November and said it would make efforts to find out by then the alternatives to compensate the Rs 1,800-crore loss to be incurred by civic bodies due to the abolition.

Welcoming the move in Ahmedabad, Mr Pankaj Patel, President of the Gujarat Chamber of Commerce and Industry (GCCI), said the body would assist the State Government in finding alternatives to octroi to help civic bodies retain their revenues for public welfare and development works. A delegation of GCCI had met the State Government representatives on Tuesday seeking immediate abolition of octroi.

Justifying the five-month period between now and November, he said the State Government needs time to put a new regime in place.

Currently, octroi rates vary, with a minimum of three per cent of the price of the commodity. Now, to abolish octroi, the State Government would have to amend the Municipal Act and related laws, presumably in the Monsoon Session of the Vidhan Sabha in September, sources said.

Briefing presspersons after the weekly Cabinet meeting here, the Urban Development Minister, Mr I.K. Jadeja, and the Minister of State for Energy, Mr Saurabh Patel, said the Cabinet meeting, chaired by the Gujarat Chief Minister, Mr Narendra Modi, took the decision after considering the viewpoints of the sub-committee formed for the purpose. The seven municipal corporations from where octroi is proposed to be abolished from November 15 are: Ahmedabad, Vadodara, Rajkot, Surat, Jamnagar, Bhavnagar and Junagarh. The Finance Minister, Mr Vajubhai Vala, had chaired the sub-committee.

In 2001, former Chief Minister, Mr Keshubhai Patel, had scrapped octroi from municipal limits of 141 smaller towns and civic areas in Gujarat.

Currently, Octroi revenues in the seven municipal corporations amount to nearly Rs 1,800 crore with an approximate increase of 20 per cent per annum.

Traders and business community had been agitating against octroi for years, particularly after levying of Value-Added Tax in the different States.