Logistics industry sore over octroi
The logistics industry is unhappy with the octroi levy being charged in various parts of the country. It is not just the additional cost logistics companies have to incur on account of octroi but they also have to suffer harassment from corrupt officials at the check nakas.
Octroi results in increase in the cost of products. For example, goods transported through the Mumbai Port attract octroi whereas transportation through J.N. Port does not invite the levy as the port falls outside the city limits. "As a result, shipment is diverted to J.N.Port," says B.H. Mankodi, Executive Director, Tricon Logistics (I) Pvt. Ltd. As octroi is not universally applicable, with many cities not charging the levy, the cost of logistics is distorted and varies from place to place. At times it also results in diversion of business. "However, diversion also depends on how much the industry depends on the external states," Bimal Lakhpatia, General Manager, Orchid Shipping Pvt. Ltd, points out.
Further, logistics companies complain that a lot of paper work is associated with octroi. Often, for paying octroi, transporters
and consignees have to stand in long queues at the check posts where officials insist on physical verification of each and every item. Sources in the logistics sector say that the octroi department should readily agree on the bills and collect the octroi, recommending rational rates for goods. As a result, people resort to measures like underarm dealings to save themselves from the troublesome octroi process.
Ultimately, Octroi duty results in business loss and increases the cost of products. Simplification of procedures and easy accessibility towards octroi and other tax-paying processes will encourage businessmen towards greater commitment and invite entrepreneurs into the logistics industry, avers Reuben Balasingh, General Manager, MOL Logistics-India Division.