What is octroi tax?

I came to know about octroi tax meaning when I had to move to a different city for my job. Simply put, it is a charge that is paid when we cross state or city borders. It is a charge that is levied on certain goods that are for personal use or for sale, by the government. These charges vary from one state or city to another and are levied on the basis of the total value of goods, the weight of goods and the number of goods.

The Octroi expenses in India

As far as I know, only two states in India levied octroi charges, Gujarat and Maharashtra. But in the year 2013, octroi charges were abolished in Mumbai, Maharashtra and it was replaced with a Local Body Tax. But after some time the octroi charges were reestablished in Maharashtra because of a reduction in the Local Body Tax. However, since 1st July 2017, the octroi tax has been abolished all over the country and GST or the Goods and Services Tax has been introduced in its place.

Charges of Octroi India

For a list of goods that are formulated by the Municipal corporation of every state, the government of each state charges octroi tax between 3 to 5%, for entry into a state. These charges differ from state to state and also on the basis of many other factors.

Where is Octroi Charged?

To determine how much octroi tax needs to be paid, a supervisor generally does an inspection of the goods when a vehicle is transported from one state to another. It is the packing and moving company that is responsible for paying octroi tax at the time of transportation. The owner of the goods then returns the amount to the packing and moving company when they reach your location with all the goods.

Now you know the octroi tax meaning.

When I was shifting my home equipment, I signed a contract with the packer company. I did it after carefully considering their services, prices, and other factors. Have your house relocation service providers informed you about the Octroi Tax? If not, you can learn in-depth about the Octroi tax India by reading this tutorial.

What are Octroi charges?

As Sanjana said, octroi is a type of fee or tax that the state government levies on items that are brought into the state or city for both individual use and trade. The fees for the things are typically assessed based on the weight, value, and overall quantity of the goods. City to city and state to state variations in tax rates are common.

Some house moving vendors might attempt to defraud you by claiming extremely high moving costs in the name of this specific tax. Before signing a contract with the moving business in this circumstance, it is crucial that you conduct thorough research.

How you should pay the Octroi tax in GST?

When a vehicle carrying goods drives through an Octroi checkpoint, the officer at the checkpoint will assess the cargo and create an estimate of the total tax that must be paid. You can request that your transport company pay the tax on your behalf. So that it can be afterwards deducted from the total cost of your move.

This is all about the Octroi tax India.

My packing and moving company told me about octroi tax when I was relocating to Gujarat in 2014. They told me that octroi duty is a tax that is collected by the state or local government on certain categories of goods that have been bought into the state/city for personal use and sale. The percentage of tax usually varies from state to state and city to city. As of 01-07-2017, with the introduction of Goods and Service Tax country-wide, the octroi has been abolished.

There are different kinds of goods on which octroi tax was levied. Some of them are mentioned below:

• Products made from wood

• Leather goods

• Cars and other motor vehicles

• Goods manufactured from silk

• Food grains

• Items made from gold

• Imported glass

• China made products

• Domesticated animals

There were two states in India, Gujarat and Maharashtra, which levied this kind of tax. However, the government abolished octroi after introducing GST (Goods and Services Tax). This was done to put an end to the harassment and corruption faced by the traders.

The percentage of charges that are imposed on the goods differs from one state to another. The lists of the goods on which the taxes were levied used to be formulated by the Municipal Corporation of the city/state.

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I hope now you have a complete understanding of what is octroi tax in India.