New local body tax to replace octroi by fiscal-end

Oct 11 2012, 02:10 IST
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SummaryThe state government has decided to scrap octroi by the end of this fiscal and replace it with an accounts-based local body tax.

The state government has decided to scrap octroi by the end of this fiscal and replace it with an accounts-based local body tax (LBT).

CM Prithviraj Chavan admitted on Tuesday Maharashtra was the only state that continued to collect octroi. He told Confederation of Indian Industry members, “We are working hard and by the end of this year, we would have moved away from octroi completely.”

Industry bodies have been vociferously demanding scrapping of octroi that allegedly lacks transparency and affects movement of goods. The government has already replaced it with LBT in many cities, but not in key cities such as Mumbai, Pune and Pimpri-Chinchwad. How BMC, octroi is whose main revenue source, will be compensated in the LBT format, however, is not clear.

Chavan said Maharashtra would become a load-shedding-free state by the end of 2012. He said a power plant recently started commercial production and another 3,500 MW would soon join it, making the state power-surplus.

CM said rapid urbanisation and related migration was another challenge. “Marathwada has been witnessing huge water shortages and there are serious problems of drinking water supply to cities such as Aurangabad and Jalna,” he told 85 CEOs from different sectors. However, CM said there were one lakh projects in the pipeline. Chavan said the state would soon move toward a single-window e-portal that will allow online tracking of applications and sort out dual-transaction issues.

“My biggest challenge is achieving uniform growth and removing regional imbalance,” he said.

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