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While
the secretary for Industries has directed that all goods
coming into SEZs within city limits be exempt from paying
octroi, the BMC has insisted that octroi should be levied
and later refunded once the SEZ occupants produce relevant
documents.
“In
our reply we have given a commitment to follow whatever
pattern the state government does for Value Added Tax
(VAT). Right now, for VAT, they have said that it is not
possible to give a direct exemption due to some legal
constraints. Until they decide to go in for direct
exemption, we will charge octroi and reimburse it
later,” said Municipal Commissioner Jairaj Phatak.
Though
Maharashtra will be the last state to abolish octroi, it
is the largest source of revenue for the BMC. In 2006-07,
the revenue from octroi collections was a whopping Rs
3,600 crore. Octroi department officials estimate that a
mind-boggling sum would have been earned from levying
octroi on goods brought into city SEZs, money that could
have been used for developing civic infrastructure.
“The
BMC wants to go in for the refund route, which is quite a
hassle for firms in the SEZs. The central Act states there
should be a straight exemption from octroi and we will
insist on it,” said a senior official from the state’s
Industries Department, who did not wish to be named.
There
are six SEZs in the city, most of which have been proposed
as centres for information technology and information
technology-enabled services (IT/ITES). The waiver will
extend to the large bulk of capital goods and construction
materials required for setting up infrastructure for the
SEZs as well as to the raw materials and packaging
material brought into these hubs.
So
far, two SEZs—a 218-hectare IT-ITES SEZ by Royal Palms
Private Limited at Aarey Colony in Goregaon East and a
12.58-hectare SEZ by Hiranandani Builders in Powai—have
been notified within Mumbai city limits by the Centre.
Others like Ferrani Hotels Private Limited/ Ozone
Developers at Malad East (27.73 hectares), RNA builders in
Borivali (20 hectares) Bombay Industrial Corporation at
Mahul in Chembur (12 hectares) and a 10-hectare gem and
jewelry SEZ by Royal Palms have received formal approvals.
There is also the Essel Group Company’s Pan India
Paryatan Limited whose plans for a 1,000-hectare
entertainment and tourism SEZ in the Gorai-Uttan belt has
received an in-principle approval from the Union
government. Three of the ten villages that the company is
planning to acquire for the SEZ are within city limits.
Gem
and jewellery units that come under the SEZ Act in Seepz
at Andheri will also now be given a blanket waiver. So
far, only capital goods and raw materials used for
manufacturing export goods were exempt, while octroi had
to be paid for every other kind of materials
(construction, packaging, electronics, etc).
In
a letter to the BMC, Hiranandani Builders have also asked
for an octroi exemption for construction material brought
into the city for constructing SEZ buildings.
Source
: Mumbai Newsline - Mumbai, India, dated 18/01/2008
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