What is octroi transaction

A kind of municipal tax  exists in Maharastra .This  is carried out by a service agent.Tds not to be deducted on octroi as it is apyment to goverment generally octroi of 4% or 5% is charged on total sales value  inside maharastra state .octro agent servies by paying ocroi on behalf of us and get it reimbursed from us 

agreed with sivaram ji.

India has a well developed tax structure with a three-tier federal structure, comprising the Union Government, the State Governments and the Urban/Rural Local Bodies. The power to levy taxes and duties is distributed among the three tiers of Governments, in accordance with the provisions of the Indian Constitution. The main taxes/duties that the Union Government is empowered to levy are Income Tax (except tax on agricultural income, which the State Governments can levy), Customs duties, Central Excise and Sales Tax and Service Tax. The principal taxes levied by the State Governments are Sales Tax (tax on intra-State sale of goods), Stamp Duty (duty on transfer of property), State Excise (duty on manufacture of alcohol), Land Revenue (levy on land used for agricultural/non-agricultural purposes), Duty on Entertainment and Tax on Professions & Callings. The Local Bodies are empowered to levy tax on properties (buildings, etc.), Octroi (tax on entry of goods for use/consumption within areas of the Local Bodies), Tax on Markets and Tax/User Charges for utilities like water supply, drainage, etc.

Since 1991 tax system in India has under gone a radical change, in line with liberal economic policy and WTO commitments of the country. Some of the changes are:

• Reduction in customs and excise duties

• Lowering corporate Tax

• Widening of the tax base and toning up the tax administration

Originally posted by : sivaram
	A kind of municipal tax  exists in Maharastra .This  is carried out by a service agent.Tds not to be deducted on octroi as it is apyment to goverment generally octroi of 4% or 5% is charged on total sales value  inside maharastra state .octro agent servies by paying ocroi on behalf of us and get it reimbursed from us

nice and clear explanation! thank u sir