- January 20, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Subject – Economy
Context – Before value added tax and other centralised taxation systems, one of the major earnings of cities used to be from octroi.
- Octroi duty is the tax levied by local or state governments on certain categories of goods as they enter the area. It is a charge for allowing transit of good through the jurisdiction.
- Just as customs duty ensures that goods for other countries are taxed, octroi is meant to ensure that goods crossing state borders within India are taxed appropriately.
- As of 1 July 2017, with the introduction of GST country-wide, the octroi has been abolished.