A Substitute for Octroi-Entry Tax vs Business Property Tax

Report of the Committee on Substitution of Octroi, Government of Maharashtra, Bombay, October 1987; pp 97.
OCTROI is a levy on goods entering into a local jurisdiction for sale, consumption or use. It is collected at the checkpost specially set up for this purpose. The octroi officials use some rule of thumb supported by vouchers and documents, which the transporters carry with them, to determine the tax liability. This mode of assessment and collection of tax has been a subject of controversy all along. Critics have found at least two major defects in octroi: one, it obstructs smooth flow of goods thereby causing business and production losses, and two, it breeds corruption in the absence of account-based assessment at the checkpost.