To ratify octroi move, Govt to amend BPMC Act

THE Urban Development department has undertaken an exercise to make suitable amendments in the Bombay Provincial Municipal Corporation (BPMC) Act so as to ratify the Government’s recent decision to abolish octroi from November 15 (Labh Pancham) from the seven municipal corporations of Ahmedabad, Vadodara, Surat, Rajkot, Bhavnagar, Jamnagar and Junagadh.

Sachivalaya sources said on Wednesday that the Urban Development department was directed to initiate an exercise to make suitable changes in the BPMC Act, particularly the deletion of a clause authorising the municipal corporations to collect octroi. The department has been asked to complete this process before the decision to do away with octroi levy comes into force from November 15.

The sources said that after this exercise was over, the government will launch efforts to find out a viable alternative to octroi. Among the various alternatives being contemplated are imposition of cess on value-added tax (VAT) and electricity consumption. The Government is reportedly considering to promulgate an ordinance seeking to abolish octroi, which could later be replaced by an official Bill it contemplates to bring during the two-day Assembly monsoon session on July 19.

Meanwhile, a senior official in the Finance Department maintained that since the decision on octroi abolition would be implemented from November 15, the Government would not face much difficulty in compensating the revenue losses (for just four months in the current financial year) that the seven civic bodies may incur.

Asked, the official said though the present financial position of the Government is “much better,” it had sought the permission of the Reserve Bank of India to borrow upto at least Rs 500 crore from the market. Most of this amount would be utilized to provide compensation to the municipal corporation in lieu of octroi. It is estimated that the seven civic bodies would incur revenue losses of about Rs 1,700 crore every year after the decision to abolish octroi comes into force.

VAT raids on traders, scrap dealers across State

THE Gujarat Commercial Tax department on Wednesday conducted raids against iron and steel traders, caterers and scrap dealers at several places for alleged discrepancies in paying VAT (Value-added Tax). The raids were conducted by the Commercial Tax Department at over 50 different locations spread over the State. Some of the places where the raids were conducted include Ahmedabad, Rajkot, Bhavnagar, Vadodara, Gandhinagar and others.