BMC to start crackdown on road tax evaders

The Brihanmumbai Municipal Corporation (BMC) has decided to track down cases of octroi evasion by Mumbai car owners who registered their vehicles outside Mumbai to avoid paying octroi.

Octroi is a charge levied for allowing transit of goods through a jurisdiction which many people have been avoiding.

“It has been observed that people usually register vehicles outside Mumbai and use it within the BMC-administered area,” a BMC official, was quoted as saying by DNA India. He added that this practice ensures less expense for buyers but it is the civic body which suffers losses on the revenue front. Hence, BMC is now hunting for octroi evaders. Also read: Traffic fines to bite hard, when new Motor Vehicles Act is passed

Car owners in Mumbai have to pay 4.5% of their car’s price as octroi tax. However, some owners though residing in Mumbai register their cars in Navi Mumbai which attracts only 1% cess and hence save the remaining 3.5% of their cars price by evading octroi. For instance, for registering a Rs. 5 lakh car, a person who evades octroi, saves up to Rs. 17,500.

BMC has started sending notices asking citizens to submit their vehicle details. Once the data is collected BMC will ask octroi evaders to pay the 4.5% octroi. For those who fail to pay octroi, BMC will charge huge penalty such as 10% of the cost of vehicle as per octroi non-payment as per section 478 of the MMC Act, 1888. This means, for a Rs. 10 lakh car, the penalty will be Rs. 1 lakh.

By tracking down octroi evaders, BMC will not only prevent revenue losses, but can also track down illegal practices in vehicle registrations such as multiple vehicles registered on the same address.  Do you drive in Mumbai? Have you paid octroi already? Please comment below.