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IMC flays Maharashtra Govt over octroi, LBT policy

Indian Merchant Chamber (IMC) today strongly opposed the Maharashtra Government's decision to continue with octroi and local body tax (LBT), and allow municipalities to choose one of them for implementation in their respective areas.

The industry body said continuing with octroi/LBT will further breed corruption, lead to harassment of traders and also fuel inflation. "It appears that LBT or octroi is not going away. IMC is extremely disappointed with the stand the State Government has taken and left the option to municipalities to choose between LBT and octroi," IMC president Prabodh Thakker said.

IMC may remind that surcharge on value-added tax (VAT) was levied with the assurance and intention to abolish octroi. Therefore, instead of abolishing both octroi and LBT, giving an option to the municipalities is a backward step, he said. IMC has been against octroi, a local tax system inherited from British time. Maharashtra is a very forward State but it still retains the system of levying octroi, he said.

"When the surcharge on VAT was introduced several years ago, it was intentioned to replace octroi. Octroi needs to be removed because Government is making three times revenue now than what was planned by imposing additional surcharge to VAT," he said. "IMC will once again urge the Government to reconsider their decision to continue with octroi/LBT, which will add to corruption, loss of fuel, harassment to traders and would also fuel inflation," he added.

At present, LBT is in force in all municipal corporations of the State except Mumbai. Traders, who had earlier demanded scrapping of octroi and introduction of LBT, later started protesting against the latter, which is a tax on entry of goods within municipal limits.

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