Vasai SSIs fear octroi may reappear

Small- scale industries (SSIs) in the Vasai industrial belt, Navghar, fear that an octroi system will be put in place if the four municipal councils in the taluka turn into a municipal corporation.

For the time being the fear is unfounded, since there is no such proposal. But these units have already started eyeing nearby areas, such as Palghar, Boisar and Wada, to migrate.

"We are not against the octroi system, but we oppose the likely way in which it might be implemented - by floating tenders to select a private bidder to collect the tax," said Vinay Patil, president, Vasai Industries Association (VIA).

Vasai was under a gram panchayat till 1994, when Navghar Manickpur Municipal Council (NMMC) was formed and octroi implemented. For the first two years, the collection of octroi was done by the council's staff. Later, it was privatised.

"The bone of contention is the valuation of the material being brought in or out of the area. Individuals most often have to confront the octroi collectors whose valuation will always be on the higher side, even after providing genuine proof," said Anil Ambardekar, secretary, VIA.

SSIs allege that during 1996-99 these private octroi collectors used to harass the industrialists. However, with the state government taking away the municipal councils' right to collect octroi in 2000, these units had a sigh of relief.

"It was during this period that around 600 units in this area shut down unable to bear the cost of octroi," Ambardekar said.

"The highest bidder gets the contract for collecting the tax. The collector has to fulfill the commitment made to the municipal body. To top this is their eye for profit. The end result was that we were reeling under the the burden of burgeoning taxes," said Patil.

"Because of the octroi, we had a minimal growth during 1994-2000. Now we are back on the track with 5-7 per cent growth in our annual turnover," said Ambardekar.

Spread over an area of 75 acre, VIA has over 100 industrial estates with 1,500 small units. Annual turnover of the zone is Rs 500 crore with an annual export potential of Rs 100 crore.

Out of the 1,500 units, around 150 are sizeable enough to pay an excise of Rs 4-5 crore per month. The zone is dominated by engineering units (50 per cent) and plastics units (20 per cent).