Uncertainty prevails over status of octroi abolition in Cantonments after GST comes into force

Ferozepur, July 1, 2017:  The traders of Ferozepur Cantonment are doubtful over abolition of octroi after the Good and Service Tax – GST –  had come into force from July 1 as octroi is still being lievied in two cantonments in the state – Ferozepur and Jalandhar despite the fact that it was discontinued in other parts of the state for more than 10 years back.

Both – officials of cantonment board and councilors and traders could guess about the status of octroi with the introduction of GST in the country.

Sanjiv Kumar a local cantonment trader said the government should come up with clear instructions on the issue otherwise the traders will have to bear the double taxation when they are already reeling under economic distress.

The Cantonment boards are empowered to impose any tax, As per Section 66(2) of the Cantonments Act, 2006, which is in force in any municipality in the state. As octroi was imposed in various municipalities, it was levied in cantonment here also. However, the subsequent decision of the state to abolish it from municipal areas did not debar the Cantonment Board from levying it within its limits.

In fact, the state government had asked Ferozepur and Jalandhar cantonments to stop levying octroi and had offered to compensate them under the Punjab Municipal Fund (Amendment) Act, 2008. Despite making a proposal to the Ministry of Defence for amendment in the bylaws to enter into an agreement with the state government, no final decision has so far been taken.