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Bombay Custom House Agent Association (BCHAA)

Sydenham Institute of Management Studies & Research & Entrepreneurship Education (SIMSREE)

Bombay Custom House Agent Association (BCHAA)Octroi Procedure

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ACKNOWLEDGEMENT

It is my privilege to present this Study Project Report to BCHAA. The Report is based on the project entitled “OCTROI PROCEDURE”

This edition bears the imprint of many people. This acknowledgement is humble attempts to earnest thank all those who were directly or indirectly involved in the completion of the project and were of immense help to me.

I would like to thank to Mr. Nilesh Gandhi, Mr. Pankaj Shah and Mr. Suresh Dalvi of BCHAA for giving me an opportunity to do this project.

It gives me immense pleasure in availing this opportunity to express my deep sense of gratitude to Mr. Sanjay Sharma and Ms. Neha Birje for their constant encouragement and support throughout my project work.

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Table of Contents

1. SYNOPSIS............................................................................................................................................ 4

2. OBJECTIVE OF THE STUDY................................................................................................................. 5

3. OCTROI PROCEDURE.......................................................................................................................... 6

4. EXEMPTION........................................................................................................................................ 9

5. FINDINGS.......................................................................................................................................... 11

6. FEEDBACK......................................................................................................................................... 16

7. CONCLUSION.................................................................................................................................... 21

8. REFERENCE....................................................................................................................................... 23

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1. SYNOPSIS

Octroi is local tax. Octroi is mainly charged for those goods which are going to be consumed

or sold in Mumbai. Octroi is collected at Air Cargo complex (ACC), MBPT and Octroi

Check Post (road naka). Goods which are not going to be consumed or sold in Mumbai are

free from Octroi.

Octroi charges is depends upon nature of goods. . These goods are generally of considerable

value. Custom duty paid or payable on these goods is added to their value for the purpose of

levy of Octroi. It is vary from 3% to 7%. There are various forms for goods. Octroi is

calculated on final price of goods i.e. after all taxes.

During my project I visited Air Cargo Complex for 4 days from 19th, 20th, 21st and 23rd Jan,

MBPT for 3 days (25th,27th and 28th Jan), five Octroi check post for 2 days each from 3 feb to

11feb, to know the procedure of Octroi. I have conducted survey on that area. I met with

many CHA to know the procedure of Octroi and shortcomings of Octroi procedure.

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2. Objective of the Study

This project is conducted to study how Octroi procedure is conducted at ACC, MBPT

and Octroi check post and to find out the shortcomings of Octroi procedure.

A questionnaire was to be prepared which would give more and accurate information

about my project. The questions were framed in such a way so as to cover all the aspects of

Octroi procedure – namely, Octroi procedure, time required for payment, exemption

procedure. However, the analysis of these filled questionnaires would give great insight about

the Octroi procedure.

Thus, this study aims at getting to know

Octroi procedure at ACC, MBPT, Check Post (road nakas).

Levy ,assessment of Octroi on the goods

More importantly, which procedure is time bound and best practice?

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3.Octroi Procedure

Octroi is local tax. Octroi is mainly charged for those goods which are going to be consumed

or sold in Mumbai. Goods come at three places i.e. ACC, MBPT and Octroi Check Post.

Octroi charges is depends upon nature of goods. . These goods are generally of considerable

value. Custom duty paid or payable on these goods is added to their value for the purpose of

levy of Octroi. It is vary from 3% to 7%. Octroi is calculated on final price of goods i.e. after

all taxes.

After clearing goods from custom, CHA will pay Octroi or fill N form for exemption. If CHA

has to pay Octroi, then following procedure is for payment of Octroi.

At Air Cargo Complex:-1. The importer shall fill in an application to pay the Octroi on form A & form B and shall

take said forms along with the original invoice and the Bill of Entry(BOE) together with

Customs Import Entry to the Municipal Octroi Inspector.

2. The said inspector shall check the said forms with relative Bill of Entry(BOE) and shall

endorse on said forms whether the articles imported are liable to Octroi

3. If articles liable to Octroi then shall indicate there on the item no. Of schedule, the rate

and value or weight thereof as is determined by him in accordance with the provisions of

these rules.

4. The Octroi Inspector shall thereafter demand from the importer in cash the amount of

Octroi due and on receipt of same prepare Octroi Receipt (Form B) in duplicate in form

provided by the commissioner and sign and register the same in a register to be

maintained for this purpose.

5. The original Octroi receipt (form B) shall then be handed over to importer.

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At MBPT:-

1. Importer shall fill in an application to pay the Octroi on form A & B & shall present the

said form together with custom B/E to the officer in charge /MBPT.

2. The officer shall check the said form with relative document and charge the Octroi as per

schedule H & shall indorse on A& B form and copy of B/E.

3. Octroi inspector thereafter demand pay order or cash the amount of the Octroi dues and

register the same in a register to maintain for this purpose, original Octroi receipt & B

form shall them be handed over to the importer who shall thereafter be allow the removal

of the articles in to Greater Mumbai.

4. The articles liable to payment of Octroi as per schedule H sec 192(1) of MMC act 1988.

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At Octroi Check post:-

1. Octroi Agents shall fill in an application to pay the Octroi on form A & form B.

2. The Octroi Agents shall submit these forms together with the original invoice to the

Octroi Inspector who check all the articles

3. Octroi Inspector shall determine the weight or value of the article in accordance with the

provision of these rules.

4. The Octroi Inspector shall thereafter demand in cash from the Octroi Agents the amount

of Octroi due and on receipt of the same prepare Octroi receipt in duplicate and sign form

B and register the same in a Register to be maintained for the purpose.

5. The original Octroi receipt and the form B shall then be handed over to the Octroi Agent

who shall thereafter be allowed to take the articles into greater Mumbai.

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4.EXEMPTIONA. Exemption from the Octroi to be allowed under N form procedure officer incharge of

work centre will ask the Importer/Exporter or his Agent or CHA to submit his application in form N in triplicate.

Properly filled in along with Import/Export documents are under taking in prescribed form to the effect that he will comply with provision of Octroi rules 1965.

Office in charger will check the following documents before he registering N form in register.

1) All column show in N form should be completely and proper filled.

2) Rubber stamp and full address of the importer should be insisted for only type and

handwritten name and address of importer should not be accepted.

3) Name of issuing centre and rubber stamp and place of Export should be correctly shown

4) Before handing over the triplicate copy of N form to the importer. The total no of

packages to be escorted should be shown in the N form and should be certify by the

supervising authority.

B. Officer in charge after registration and taking the entries of the same in register will keep

the two copies of N form along with copy of document and under taking at the place of

import and handover triplicate copy of N form to the Import/Export or custom agent at

the time removal article from the place of import for producing the same at the place of

export along with article for Export certification by Octroi staff.

C. Office incharge of import work centre will arrange to dispatch through courier the 2

copies of N form along with copy of documents to the place of Export.

D. On presentation of the triplicate copy of N form along with the articles covered by the N

form by import/export the Octroi staff at the place of exporter will match the triplicate

copy with 2 copies of N form and copy the documents with received through courier and

fallow the usual procedure of certification of N form.

E. After comparing the rotation no, line no, number of pallets and also weight of pallets

recorded in N form with document produce by the import/export after following the usual

procedure of certificate of N form. The original certified copy should be returned to

import/export or his agent. The copy of n form should be send to import work centre the

triplicate copy of certified n form along with document should be send dy. Assesser &

collector (o) head office.

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Various Other Forms:-

Form “P” :-

Application for exemption in respect of “ Returned Goods”.

Form “R” :-

Application for exemption in respect of articles imported/exported temporarily into or from

Greater Bombay.

Form “W” :-

Application for exemtion on account of “free gifts”

Form “X” :-

Application for exemption to be used by Charitable Institutions.

Form “Y” :-

Application for exemption in respect of rticles imported for the use of the Corporation.

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5. FINDINGS

Air Cargo Complex

Following things are my observation at ACC:-

1. At ACC, strictly checked all the documents which is necessary and it takes time as there

is only 2 members work. Sometimes only 1 person is working. It creates bottleneck and

increase pressure on Octroi Inspector. So sometimes staff behavior is rude. If there is

more no of table for verification of documents, then it reduces work load and Octroi

Inspector can direct CHAs properly when CHAs made mistake in any document.

2. Small error in documents is not acceptable and Inspector do not show all the mistake at

one go. If Inspector shows all mistakes at time then time required for payment process

will reduce.

3. According to CHAs, staff / officer demand for more documents. IEC copy is enough for

regular customer.

4. According to CHAs to complete all procedure of Octroi payment takes about 1hour and

time required for exemption procedure is about 30 min. this may be because of not well

organized space.

5. Most of CHA has work related with exemption of goods and exemption of goods required

more document than payment of Octroi.

6. Though procedure at ACC & MbPT is same, time take at ACC is more. It is because staff

performance.

7. No action has been taken from BMC on complaints of CHAs.

8.

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MBPT

Following are my observation at MbPT:-

1. Work load at MBPT is less than work load at ACC. Bottle neck position rarely

happens as compared to ACC.

2. Time taken to complete procedure depends upon work load. It generally takes 45 min.

it is less due to well organized space for work.

3. Time taken to complete exemption procedure depends upon work load. It generally

takes 30 min

4. Most of CHA has work related with exemption of goods and exemption of goods

required more document than payment of Octroi.

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Octroi Check Post(Naka)

1. Express highway Naka:-The next target of mine was Road Nakas. I went to Express- highway Naka. I

visited this naka during day time i.e. after 2 pm. I saw there was long line of truck

and other vehicles. Truck drivers were waiting for 2-3 hrs in queue. On this naka

there was crowed of CHAs. Very slow process as compared to other Naka`s

process.

Following are my observations:-

1. Time required for completion of whole procedure is more than 1.30 hours.

2. There is no separate window for single form and bunch of form.

3. Staff at nakas are not used to with new computerized system

4. Lack of skill staff at all nakas so it increase time for completion

5. Token system has been started from Aug 2011.

6. CHAs are not finding easy with token system

7. According to CHAs, token system is unnecessary.

8. No action has been taken from BMC on complaints of CHAs.

2. Mulund Naka:-I visited Mulund Naka at evening. I talked to Mr. More who is officer over there

to know about procedure at there. He refused to comment on token system.







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3. Dahisar Naka:- I visited this naka and I found that very strict procedure is conducted over there.

Procedure is same as that of other nakas.








4. Airoli Naka:-








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5. Mumbai – Panvel highway Naka:-







6. According to CHAs, token system is unnecessary

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6.Feedback Feedback from CHAs…… At ACC

Figure 1

18%

50%

23%

9%

Time taken for completion of octroi payment

0-1 hrs1-2 hrs2-3 hrs> 3 hrs

Time required for completion of Octroi payment depends upon work load. 50% CHAs

said that time required for completion is around 1-2 hrs while 23% CHAs said it takes

2-3 hrs. Only 9% CHAs said it takes more than 3hr.

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73%

27%

Are they(BMC) demand for more document

CHA said YesCHA said No

Figure 2

73% CHAs said that Octroi Inspector demand for more documents. They have to show all

documents every time. Repetition of document verification can be eliminating by using

computerized system. It will reduce time required for completion of Octroi payment. Once

you feed data of one importer and issue importer a one permanent number so importer can

use that no for next time. Next time importer will enter only permanent no and Inspector will

get all data about importer. It also reduces paper work as well as it increase working

efficiency. If there is Less paper work then less error.

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At nakas..

73%

27%

Is there lack of skilled staff


73% of CHAs said staff which appointed by BMC is not upto the mark. Staffs have lack of

computer skill. Due to staff`s poor performance, time required for payment of Octroi is more.

Staffs are not used to with new system. Staff may be required training or BMC should

appoint skilled staff.

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Figure 3

77%

23%

Do you want token system?


Token system is started from Aug 2011. 77% CHAs find uneasy with new token system. As

time goes on they will used to with new system. Token system is necessary for smoothness in

work and avoid dispute.

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100%

Is Online system beneficiary


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7.CONCLUSION

1. Due to EDI system, paper work is reduced at some extent but not fully utilized of EDI

system by BMC. Still there are some drawbacks such as no sharing information

between custom system and BMC Octroi office ,no database of importer is

maintained, computers are used for only data storage which can be overcome

2. Repetition of document verification can be eliminating by using computerized system.

It will reduce time required for completion of Octroi payment. Once you feed data of

one importer and issue importer a one permanent number so importer can use that no

for next time. Next time importer will enter only permanent no and Inspector will get

all data about importer

3. Less time will take in EDI system than non- EDI system if fully utilization of system

is done by BMC.

4. Strict checking is necessary at office so CHA must know which document is

necessary and accurate. Mostly employees are present over there rather than senior

member. So either training is necessary or provides information about documentation

on site for CHAs. CHAs will get clear idea about documentation while filling the

application for Octroi.

5. BMC should appoint skilled staff so accuracy will be increased as well as time

required for payment decrease.

6. Online system is beneficiary.

7. Staff is not following office timing. They come late for office. Sometimes their

behavior is not up to the mark. Besides this there is less no of windows at ACC for

checking

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8. Token system is currently started and its too early to comment on it. It requires some

time so CHA can used to with it.

9. There must be different queue for bunch and single form so it reduces time.

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8.REFERENCE

1. Octroi rules hand book

2. Shah`s Octroi hand book

3. www.google.com

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