Kalyan traders protest hike in octroi duty

He questioned why KDMC was levying more octroi on small manufacturers and traders to make up for its losses. 8220;Closure of the PAL-Peugeot plant at Khidkali has led to loss of Rs 18 crore per annum to KDMC. Big industries like National Peroxide and National Rayon Corporation Ltd are functioning on reduced capacities, causing further losses in octroi. So, does KDMC want to shift the burden on to us?8221; he asked.

He feared there would be mass exodus of units to areas like Taloja, Murbad, Wada and nearby Gujarat where there8217;s no octroi. He said traders were being forced to compete with industrialists from Ambernath, Badlapur, Thane and Navi Mumbai, where octroi is only 1.25 per cent. According to him, 35 of the 170 chemical units and 60 of the 360 engineering units had closed down in the past two years.

He alleged that KDMC charged octroi on textiles ad valorem and not according to weight, and said traders objected to the declaration forms and letters they were sent on the lines of the VDIS scheme. 8220;Does the octroi department want to allege we8217;re all octroi thieves?8221; he asked.

Deputy municipal commissioner in-charge of octroi R K Sonawane said he would not give in to 8220;pressure tactics8221; of KAMA and maintained raising of rates wasn8217;t wrong because 8220;octroi is a discretionary tax to be levied by civic body.8221;

He said octroi on textiles was earlier being charged on the basis of weight, in contravention of rules. Schedule 1 stipulates that textiles be charged ad valorem and not by weight. 8220;By not adhering to rules KDMC has lost Rs 140 crore as revenue,8221; said Sonawane, who corrected matters after he took over as additional commissioner in 8217;97. 8220;Manufacturers have also enjoyed benefits like a 35 per cent state subsidy, low-rate bank loans and cheap land,8221; he said.

8220;The statement about octroi payments they8217;ve been asked to furnish is in keeping with rules,8221; he explained, expressing surprise over the protest 8220;after KAMA had accepted this in a meeting with me.8221; He said it was impossible to go by declarations made to the excise and sales tax department. 8220;Do they submit authentic records to these departments?8221; he asked.

8220;We don8217;t mind submitting statements about octroi paid,8221; a chemical manufacturer said, adding, 8220;But there is fear this information may be passed on to the income tax, sales tax and excise departments.8221;

The manufacturer admitted traders indulged in theft. Giving instances of how octroi staff is misled, he said, 8220;Names of chemicals are substituted, leading to drastic reduction of rates. For example, poly vinyl alcohol costing Rs 120 per kg is brought in with a label saying it8217;s sodium bicarbonate costing Rs 16 per kg. Plus, no octroi is paid on aromatic chemicals some of which cost Rs 15 lakh per kg. These are smuggled in small packages.8221;

Sonawane said fear of such exposes was increasing the stridency of protests against him.

Meanwhile, KAMA is planning to ask the state government to merge octroi with sales tax. 8220;Till then at least octroi rates should be made uniform in the state,8221; said Deo.

But urban development secretary Nand Lal said the state government would not intervene on octroi. 8220;We keep telling civic bodies to become self-sufficient and not expect any doles from the state,8221; he said.

At a recently held conference of presidents and chief officers of municipal councils in the state, Chief Minister Narayan Rane had said: 8220;Civic bodies should get tough on octroi collection to shore up their depleting finances.8221;