What is Octroi?
The word Octroi has its roots in the French word 'Octroyer' which is derived from a Latin word auctorizare, the literal meaning being to authorize or to grant. It used to denote a tax levied on goods brought into town, and was collected at the city gates. Since this levy was imposed under Octroyer, that is, a royal grant, it was known as octrois, which later became Octroi.
In modern usage Octroi is a local tax collected on articles brought into a town for local use by various local bodies like corporations, municipalities, zilla parishads, village panchayats etc.
Levy of Octroi is based on the value, weight, length and number of articles. Basis of levy may vary from State to State or even between different local bodies within a State.
OCTROI IN MUMBAI
Municipal Corporation of Mumbai is known as
Bruhanmumbai Municipal Corporation (Bmc)
The BMC used to levy a tax called 'Town Duty' since 1912 for all articles imported into the town limits irrespective of whether the articles brought in were to be consumed, used or sold within its limit or not.
In 1965, Octroi a tax to be levied on specified articles at their time of entry into the limits of the Greater Bombay for consumption, use or sale was introduced. The Municipal Commissioner is empowered to frame rules, governing the procedures of levy, Assessment and collection of Octroi, refund and exemption.
Places of import were identified for purpose of levy
1. Import by Sea : Docks Wharfs
2. Import by Rail : Railway stations, Depots, Sidings
3. Import by Air : Airport terminals
4. Import by Road : Municipal octroi posts at roads across Greater Bombay limits
The word Octroi has its roots in the French word 'Octroyer' which is derived from a Latin word auctorizare, the literal meaning being to authorize or to grant. It used to denote a tax levied on goods brought into town, and was collected at the city gates. Since this levy was imposed under Octroyer, that is, a royal grant, it was known as octrois, which later became Octroi.
In modern usage Octroi is a local tax collected on articles brought into a town for local use by various local bodies like corporations, municipalities, zilla parishads, village panchayats etc.
Levy of Octroi is based on the value, weight, length and number of articles. Basis of levy may vary from State to State or even between different local bodies within a State.
OCTROI IN MUMBAI
Municipal Corporation of Mumbai is known as
Bruhanmumbai Municipal Corporation (Bmc)
The BMC used to levy a tax called 'Town Duty' since 1912 for all articles imported into the town limits irrespective of whether the articles brought in were to be consumed, used or sold within its limit or not.
In 1965, Octroi a tax to be levied on specified articles at their time of entry into the limits of the Greater Bombay for consumption, use or sale was introduced. The Municipal Commissioner is empowered to frame rules, governing the procedures of levy, Assessment and collection of Octroi, refund and exemption.
Places of import were identified for purpose of levy
1. Import by Sea : Docks Wharfs
2. Import by Rail : Railway stations, Depots, Sidings
3. Import by Air : Airport terminals
4. Import by Road : Municipal octroi posts at roads across Greater Bombay limits
VARIOUS OCTROI FORMS USED
A-B /FORM'S
- Octroi in Mumbai is paid through forms, which gives complete details of the shipments. The form is filled in duplicate. Form `A' is the original form and form `B' is duplicate copy. While calculating octroi the freight is included to the invoice value.
- The check post authorities retain form `A' along with the photocopy of the Invoice. Form `B' along with the original document is handed over to the customer in our case its through BLUE DART EXPRESS LIMITED to the consignee.
C & CC FORM
- In the event of wrong payment of Octroi or rejection of a material by the consignee in BOM due to a valid reason, Octroi refund can be claimed from the Municipal Corporation.
- The goods for which Octroi refund is to be claimed has to be exported out of Mumbai under Form-C in case the export is by sea or air or under Form-CC in case the export is by road.
- After the Form-C or Form-CC is stamped at the check post the customer in Mumbai has to apply for refund with the BMC authorities.
- The amount paid as Octroi is refunded after deducting 6.25% as service charges by MMC.
N - FORM
- Is an application for exemption in respect of articles imported for immediate export. Goods cleared under N-form should be exported within 7 days (168 hrs)
. - N-form is required for exemption from Octroi for shipments imported into Mumbai for immediate exports i.e. for shipments transiting through Mumbai.
- For apex shipments transiting through Mumbai received by air the Dart Apex team completes the N-form in triplicate.
- The Octroi inspector in the airline cargo warehouse checks the shipments against consignment airway bill, invoice and certifies the N-form.
- The certified copies (3 copies) of N-form accompany the shipment and the paperwork to the exit check post. These exit check post can be any one of the five-road check post listed above.
- At the exit check post, the Octroi inspector checks and stamps the N-form and returns the Original copy of N-form to Courier/transporter staff.
- For apex shipments received by surface for upliftment by air, the BHI staff complete the N-form in triplicate.
- At the entry check post (EEH), Octroi inspector verifies the shipment against invoice/airway bill, and certifies the N-form and hands over the triplicate copy to Courier/transporter staff.
- This copy of N-form along with other paperwork and the shipment is produced to the octroi inspector at airline cargo warehouse for closing of the N-form.
- In case the shipment does not tally with the descripttion on invoice or the invoice is incomplete/incorrect the shipment may be detained by the octroi inspector.
- In case the consignee imports the shipment into Mumbai for export on his own through rail, road, sea or air subsequently the N-form formality will have to be completed by consignee in case he wants exemption form Octroi.
- Incase for some reason the point of exit/export needs to be changed Courier/transporter staff will have to file application for redirection paying the requisite fees.
- Incase of non closure of N-form both the consignor and the carrier, in our case Courier/transporter, are liable to pay an amount equivalent to the Octroi amount that may have accrued had the shipment not been cleared through N-Form, and the risk of being black listed and de-recognized by BMC.
R-FORM
- This is an application for exemption in respect of goods imported or exported into or out of Mumbai.
- This facility is available for shipments traveling for demonstration, repairs etc.
- Temporary deposit equivalent to the Octroi amount is to be paid in cash or in the form of DD addressed to 'The Municipal Corporation of Greater Mumbai'.
- R-Form is to be filled in triplicate. At the time of opening, the Octroi Official retains original copy; duplicate and triplicate copies are returned to the carrier/ customer.
- At the time of closing, the duplicate and triplicate copy, the invoice, deposit receipt along with the shipment is to be produced at the check post. After due inspection the officer affixes his signature with remarks on these copies and retain the duplicate copy. Triplicate copy is handed over to customer, which along with the temporary deposit receipt is used to claim refund from BMC.
- The validity of R-Form is for six month. Any shipment imported or exported in or out of Mumbai has to return within 6 months, failing which the R form deposit will stand forfeited.
- Amount paid as temporary deposit is refunded after deducting 6.25% as service charges.
X-FORM
- This is required for exemption of Octroi for articles imported into Mumbai by charitable institution for charitable purpose
- Consignee provides a guarantee in writing to produce within 6 months from the date of import the necessary evidence that the articles have been used for the charitable purpose for which they have been imported. Photocopy of the charitable certificate is to be submitted at the time of clearance under X-form.
A-B /FORM'S
- Octroi in Mumbai is paid through forms, which gives complete details of the shipments. The form is filled in duplicate. Form `A' is the original form and form `B' is duplicate copy. While calculating octroi the freight is included to the invoice value.
- The check post authorities retain form `A' along with the photocopy of the Invoice. Form `B' along with the original document is handed over to the customer in our case its through BLUE DART EXPRESS LIMITED to the consignee.
C & CC FORM
- In the event of wrong payment of Octroi or rejection of a material by the consignee in BOM due to a valid reason, Octroi refund can be claimed from the Municipal Corporation.
- The goods for which Octroi refund is to be claimed has to be exported out of Mumbai under Form-C in case the export is by sea or air or under Form-CC in case the export is by road.
- After the Form-C or Form-CC is stamped at the check post the customer in Mumbai has to apply for refund with the BMC authorities.
- The amount paid as Octroi is refunded after deducting 6.25% as service charges by MMC.
N - FORM
- Is an application for exemption in respect of articles imported for immediate export. Goods cleared under N-form should be exported within 7 days (168 hrs)
. - N-form is required for exemption from Octroi for shipments imported into Mumbai for immediate exports i.e. for shipments transiting through Mumbai.
- For apex shipments transiting through Mumbai received by air the Dart Apex team completes the N-form in triplicate.
- The Octroi inspector in the airline cargo warehouse checks the shipments against consignment airway bill, invoice and certifies the N-form.
- The certified copies (3 copies) of N-form accompany the shipment and the paperwork to the exit check post. These exit check post can be any one of the five-road check post listed above.
- At the exit check post, the Octroi inspector checks and stamps the N-form and returns the Original copy of N-form to Courier/transporter staff.
- For apex shipments received by surface for upliftment by air, the BHI staff complete the N-form in triplicate.
- At the entry check post (EEH), Octroi inspector verifies the shipment against invoice/airway bill, and certifies the N-form and hands over the triplicate copy to Courier/transporter staff.
- This copy of N-form along with other paperwork and the shipment is produced to the octroi inspector at airline cargo warehouse for closing of the N-form.
- In case the shipment does not tally with the descripttion on invoice or the invoice is incomplete/incorrect the shipment may be detained by the octroi inspector.
- In case the consignee imports the shipment into Mumbai for export on his own through rail, road, sea or air subsequently the N-form formality will have to be completed by consignee in case he wants exemption form Octroi.
- Incase for some reason the point of exit/export needs to be changed Courier/transporter staff will have to file application for redirection paying the requisite fees.
- Incase of non closure of N-form both the consignor and the carrier, in our case Courier/transporter, are liable to pay an amount equivalent to the Octroi amount that may have accrued had the shipment not been cleared through N-Form, and the risk of being black listed and de-recognized by BMC.
R-FORM
- This is an application for exemption in respect of goods imported or exported into or out of Mumbai.
- This facility is available for shipments traveling for demonstration, repairs etc.
- Temporary deposit equivalent to the Octroi amount is to be paid in cash or in the form of DD addressed to 'The Municipal Corporation of Greater Mumbai'.
- R-Form is to be filled in triplicate. At the time of opening, the Octroi Official retains original copy; duplicate and triplicate copies are returned to the carrier/ customer.
- At the time of closing, the duplicate and triplicate copy, the invoice, deposit receipt along with the shipment is to be produced at the check post. After due inspection the officer affixes his signature with remarks on these copies and retain the duplicate copy. Triplicate copy is handed over to customer, which along with the temporary deposit receipt is used to claim refund from BMC.
- The validity of R-Form is for six month. Any shipment imported or exported in or out of Mumbai has to return within 6 months, failing which the R form deposit will stand forfeited.
- Amount paid as temporary deposit is refunded after deducting 6.25% as service charges.
X-FORM
- This is required for exemption of Octroi for articles imported into Mumbai by charitable institution for charitable purpose
- Consignee provides a guarantee in writing to produce within 6 months from the date of import the necessary evidence that the articles have been used for the charitable purpose for which they have been imported. Photocopy of the charitable certificate is to be submitted at the time of clearance under X-form.
EXEMPTION FROM OCTROI
Exemption is given for shipments forwarded to consignees who are located within SEEPZ Andheri limits, but for getting the exemption the consignee needs to complete the below formalities.
Apply to Director of Customs Seepz Mumbai, with a letter and R form in triplicate, Director stamp and certify the R form stating to allow exemption.
Consignee has to handover the said R form to Blue Dart, which will be submitted to BMC authorities and R form will be opened at the BMC entry gate by paying Rs 100/- towards processing fees. The 2 copies of opened R form will be handed over to client at the time of delivery.
Consignee should take care of closing & certifying the R form at the time of export.
Blue Dart is not responsible for closing the said R form.
CONTAINERS OF DURABLE NATURE
- Used containers of durable nature imported into Greater Bombay limits may be exempted from Octroi provided:
- Importer provides declaration that the consignment consists of used containers of durable nature and agrees to make cash deposit as may be fixed by Octroi authorities as a guarantee that such containers are exported from Greater Mumbai duly filled up.
- Importer agrees to render a monthly account of import and export of such empty containers to Octroi authorities.
- Containers of durable nature means containers of type that are ordinarily used more than once E.g. drums, barrels, gas cylinders, aerated water bottles, glass or plastic carboys for acids, chemicals etc.
EXEMPTION FOR PERSONAL LUGGAGE
- Articles brought in as personal luggage by any person may be exempted from octroi whether the person accompanies such luggage or not.
- The consignor/consignee has to give a declaration that the articles have been his property and are brought for his personal use or for the use of the family and are not for sale or for the use of other people
- Such exemptions are normally available for articles liable for Octroi of value up to Rs. 150/- and or weighting up to 20 kgs.
- In case the value or the weight of the articles brought in as personal luggage exceeds the limit of free allowance the commissioner can use his discretion and decide whether to exempt from Octroi or not.
FOR PERSONAL BELONGINGS OF:
- Govt. officials or officials of the corporations is permissible on production of a certificate signed by the head of the Department to which the official belongs or incase of head of department by a secretary to State/Central Government or by a Deputy Municipal Commissioner and for a MP/MLA/MCC on production of a certificate signed by the concerned secretary attached to Lok Sabha, Rajya Sabha, State assembly or State council.
- For retired Central/ State Government official for entry within a year from the date of retirement of production of a certifying the date of his retirement from Govt. service by his head of department or in case of head of department by a secretary to State/ Central Government.
- For family members of a State/Central Government official whose demise occurs while in service, for entry with in a year from the date of death on production of a certificate duly signed by the head of the department, about the status of the demised government official and the date of his death while in service.
- For diplomatic missions and diplomatic officers for articles imported through Mumbai for subsequent dispatch outside Mumbai on production of sufficient documentation to this effect.
- Articles imported by the following organizations, their officials and representatives for their bonafide use of production of declaration by them
a United Nations Organization
b. Internal civil Aviation Organization
c. World Health Organization
d. International Labour Organization
e. Food and Agricultural Organization of United nations
f. United Nations educational scientific and cultural Organization
g. Internal monitory fund
h. Internal Banking of reconstruction and development
i. Universal Postal union
And such Organizations of International Importance.
Exemption is given for shipments forwarded to consignees who are located within SEEPZ Andheri limits, but for getting the exemption the consignee needs to complete the below formalities.
Apply to Director of Customs Seepz Mumbai, with a letter and R form in triplicate, Director stamp and certify the R form stating to allow exemption.
Consignee has to handover the said R form to Blue Dart, which will be submitted to BMC authorities and R form will be opened at the BMC entry gate by paying Rs 100/- towards processing fees. The 2 copies of opened R form will be handed over to client at the time of delivery.
Consignee should take care of closing & certifying the R form at the time of export.
Blue Dart is not responsible for closing the said R form.
CONTAINERS OF DURABLE NATURE
- Used containers of durable nature imported into Greater Bombay limits may be exempted from Octroi provided:
- Importer provides declaration that the consignment consists of used containers of durable nature and agrees to make cash deposit as may be fixed by Octroi authorities as a guarantee that such containers are exported from Greater Mumbai duly filled up.
- Importer agrees to render a monthly account of import and export of such empty containers to Octroi authorities.
- Containers of durable nature means containers of type that are ordinarily used more than once E.g. drums, barrels, gas cylinders, aerated water bottles, glass or plastic carboys for acids, chemicals etc.
EXEMPTION FOR PERSONAL LUGGAGE
- Articles brought in as personal luggage by any person may be exempted from octroi whether the person accompanies such luggage or not.
- The consignor/consignee has to give a declaration that the articles have been his property and are brought for his personal use or for the use of the family and are not for sale or for the use of other people
- Such exemptions are normally available for articles liable for Octroi of value up to Rs. 150/- and or weighting up to 20 kgs.
- In case the value or the weight of the articles brought in as personal luggage exceeds the limit of free allowance the commissioner can use his discretion and decide whether to exempt from Octroi or not.
FOR PERSONAL BELONGINGS OF:
- Govt. officials or officials of the corporations is permissible on production of a certificate signed by the head of the Department to which the official belongs or incase of head of department by a secretary to State/Central Government or by a Deputy Municipal Commissioner and for a MP/MLA/MCC on production of a certificate signed by the concerned secretary attached to Lok Sabha, Rajya Sabha, State assembly or State council.
- For retired Central/ State Government official for entry within a year from the date of retirement of production of a certifying the date of his retirement from Govt. service by his head of department or in case of head of department by a secretary to State/ Central Government.
- For family members of a State/Central Government official whose demise occurs while in service, for entry with in a year from the date of death on production of a certificate duly signed by the head of the department, about the status of the demised government official and the date of his death while in service.
- For diplomatic missions and diplomatic officers for articles imported through Mumbai for subsequent dispatch outside Mumbai on production of sufficient documentation to this effect.
- Articles imported by the following organizations, their officials and representatives for their bonafide use of production of declaration by them
a United Nations Organization
b. Internal civil Aviation Organization
c. World Health Organization
d. International Labour Organization
e. Food and Agricultural Organization of United nations
f. United Nations educational scientific and cultural Organization
g. Internal monitory fund
h. Internal Banking of reconstruction and development
i. Universal Postal union
And such Organizations of International Importance.
With Regards,
Binod Kr. Sinha
CAclubindia
