BMC8217;s flawed chemistry

Last week, when chemists all over the city went on an indefinite strike to protest the two per cent octroi levied on medicines for the first time, Satam suggested a 8220;simple8221; solution 8212; the chemists should take part in the development of the city, and the administration would consider their demands to either decrease or withdraw the duty on medicines, depending on the money pumped in bythe chemists. After all, Satam8217;s argument went, the chemists earn their bread and butter from the city, and they should assist BMC in the development of the city if they expect some benefits.

The BMC has, in fact, received a proposal from a certain company asking that octroi duty on its goods be waived, because the company had provided financial assistance to the nation during the 1971 war with Pakistan. The civic administration is verifying details of the proposal.

However, Satam8217;s 8220;simple solution8221; hasn8217;t found too many takers, and even before his proposal could take final shape, criticism has begun to pour in on the workability of a new arrangement between the BMC and the chemists.Nobody is denying that the financial assistance from chemists will be used in the interests of the public and not for any personal gain, but a lot of people are still sceptical about the new arrangement mooted by the Mayor.

The first question that comes to mind is: why should chemists share the burden of the BMC unlessthey are to profit in some manner? After all, it is the obligatory duty of the BMC to provide civic amenities to citizens and collect taxes to run the corporation like any other form of government.

Also, if the BMC waives the duty for chemists after an understanding between the two is reached, other organisations might make a demand for similar concessions. As octroi is the major source of income for the BMC, accounting for over 70 per cent of its revenue, any relaxation in this regard will set a bad precedent.

8220;The BMC should collect the octroi duty and then decide what is to be done with it, rather than let individual organisations decide what they can do to make up for the money they8217;re supposed to pay as tax,8221; opined a member of the Mayor-In-Council. If everybody takes up development programmes instead of paying octroi duty, the BMC will be left with no money and no work.

Plus, do the chemists have the expertise to take up the work which Satam has been hinting at, such as construction ofroads?

The kind of understanding now suggested between the BMC and chemists also goes against the laws of taxation. 8220;As octroi is a tax, it is to be compulsorily collected by the authorities,8221; explained B M Ambhaikar, former additional municipal commissioner. He added that such arrangement as is being envisaged now will militate against the basic tenets of taxation.

Ambhaikar felt that a public debate on the issue is a must, and that some changes in the octroi rules will have to be made if both parties agree to an arrangement. However, if it is a goodwill gesture on the part of the chemists and they don8217;t obtain any benefits in return, it would be perfectly fine, he remarked.

Few are willing to buy Satam8217;s explanation that if chemists submit proposals which exceed the sum they pay as octroi, the administration would certainly consider it. Why should a chemist doing business in Mumbai cough up a bigger amount than that forced on him as octroi?

He would rather pay the tax than take part in thedevelopment of the city.

Prasanna Khapre is a reporter with The Indian Express. She covers BMC