You might be wondering what the octroi charges and taxes mean, well they are simply the amount of money that you pay when you cross the boundaries of another state. The state government charges certain taxes on different goods for personal use.
These octroi taxes are not the same everywhere as each state has its laws on taxation. It can differ from state to state. Certainly, we see that it is calculated based on the goods, value, and weight. Of course, the quantity also matters.
Octroi charges were not changed in any other state other than Gujarat and Maharashtra. Factors like the amount of the goods, their value, and certainly their weight as well. Octroi charges will differ from person to person based on their goods.
A detailed guide is prepared for you that will tell you all about the octroi taxes. Each question that you have will be answered below. So read it carefully and diligently.
Which States Implemented Octroi Tax?
Well, the first two states to introduce the octroi taxation laws were Maharashtra and Gujarat. They levied octroi charges against imports and exports. The laws were first abolished in the Mumbai city in 2013. They were later reintroduced as Local Body Tax.
In the end, the state had to levy the octroi charges again due to a decrease in the amount of the Local Body Tax collection. As for now, the octroi charges have been abolished in India since 1st Jan 2017, introducing the GST – Goods and Service Tax.
Also Read: GST Rates for Packers and Movers Services in India
Origin of Octroi
Octroi has been implemented in the world for a long time. Many countries and regions have applied octroi taxes in their history. When it comes to the implication, it was applied in Italy for the first time. It was also applied in France before the revolution era, as it led to the famous French Revolution.
The country had to abolish it in the year 1948, because of time-to-time protestations and discomforts. In India, it was levied by the government to get taxes from the small towns on imported goods. Octroi tax is also a part of ancient India, it was mentioned in the Arthshastra.
So we can observe that the taxes have been levied in many countries and states for the use of tax collection on imported goods and other items.
How to Calculate Octroi Tax?
Octroi charges levied by different states are different in their duties based on their taxation laws. The Municipal Corporation levied the charges on some goods, there is a list for these goods. It would depend on your journey.
Compile the list of the goods you are taking with you and see that the packers and movers company that you hire are aware of this list. They will take care of these taxes but you will have to pay them. Hiring the right movers and packers company is an important step. Rajbala packers and movers are your answer for that one.
The government levies octroi taxes against these items:
- Gold and silver items
- Wood products
- Food grains
- Glass
- China products
- Silk items
- Domesticated animals
- Cars and Other Vehicles
- Leather goods
Also Read: What is E-Way Bill Limit? State-wise Threshold Limits for E-way Bills
Octroi Charges in India
The Indian Government charges about 3% to 5 % of octroi charges by different state governments. These duties are levied on the goods mentioned by the municipal corporation. The list complied contains all the items that have duties imposed on them.
Octroi charges are not regular as they keep getting changed and revised because of the fluctuations in the taxation laws based on the economy and other such factors. It keeps changing rapidly and is never quite the same.
As the vehicle carrying the goods reaches the state borders, the supervisor will inspect the goods and calculate the amount of taxes you have to pay based on his calculations. As the packing and moving company you have employed is carrying your goods.
They will pay the amount at the time of payment, which you will repay them when your items reach their place and the final amount can be paid. You can ask and see how much the taxes cost in the final bill. If the sum is large, you might ask them to shift the tax charges a little.
Octroi Now
Octroi was levied as part of the taxes by two states, Maharashtra and Gujarat, which was later abolished on 1st Jan 2017. Instead, we see that the government implied GST. Octroi has been abolished and GST was chosen in its place.
Octroi was taken up and changed as each state had its own taxes and they were all different. Each person was paying different amounts of taxes based on their goods and their duties. So there was a need for a uniform taxation policy.
Also Read: What is the Cost of Moving Car from Delhi to Bangalore? Complete Guide
Why GST Chosen Over Octroi Tax/
As the states have different duties for their import and export policies, they were charging different amounts. So the laws were abolished. As there was no uniformity in the policies, there was a need for a uniform taxation policy.
So the government introduced the GST, Goods and Services Tax. It is more uniform and does not have any hidden charges and policies. With this introduced, the octroi taxes lost their significance.
- GST brought all the taxes under one section.
- GST reduced the amount of logistics.
- Regulation and accountability are encouraged.
- GST helped in reducing the charges based on several items and taxes as well.
- GST collected will be distributed to the under-developed regions of India all over.
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Conclusion
We have curated all the info about octroi taxes and charges. From their origin and history to their charges and significance. All the bases have been covered. You can see that this makes the octroi taxes abolished and instead the GST has been applied by the government.
Further if you’re looking to calculate your Moving Cost Fare then without any doubt you can check out our Packers and Movers Cost Calculator for your next move.