Indian Express 21.06.2010
BMC counts its octroi losses if HPCL shifts out of city
sharvaripatwa Tags : corporation, HPCL Posted: Mon Jun 21 2010, 03:02 hrs
Mumbai: The country’s richest civic body is set to lose a large chunk of its annual octroi collections if Hindustan Petroleum Corporation Ltd (HPCL) shifts out of Mumbai, as proposed. Currently, the state-run oil and gas company pays the BMC an average of Rs 350 crore annually in octroi levied on crude oil.
“HPCL has paid octroi tax to the amount of Rs 318 crore for the period April 2009-March 2010,” said R G Sankhe, deputy assessor & collector. An additional Rs 30-Rs 40 crore might be collected from the company at various octroi check-nakas under various tax heads, said a civic official.
According to reports, the company has recently got clearance from the Ministry of Petroleum and Natural Gas to conduct a feasibility study on shifting its Chembur refining operations out of Mumbai to a new facility that could be planned further south along the Konkan coast.
“The shift wil hamper octroi collections but the BMC will continue to get octroi for the supply of crude oil to Mumbai for the city’s needs,” said Y G Lad, assessor & collector (vigilance).
HPCL was not ready to confirm whether a shift is due. K Murali, Director(Refineries) of HPCL, said, “In case of a probable shift of refinery from Mumbai, the crude oil which comes to Mumbai will go somewhere else, and to that extent the city stands to lose octroi duty collections.”
The loss would be a large percentage of total octroi collections, said an octroi department official. Along with property tax, the octroi department is a key money-spinner for the BMC.
The octroi department had collected Rs 4,522 crore in 2009-2010. Together, octroi, property tax and collections from development charges levied on builders account for the largest revenue receipts in the BMC budget. However, collections in octroi, the top earning department over the years, have been going down following fluctuations in crude oil rates and reduction in import of foreign goods.
Oil companies contribute about Rs 1,400 crore in revenue to the BMC annually.
