HYDERABAD: While the
controversy over land acquisition and payment of compensation over
railway properties from Sangeet junction to Tarnaka stretch is yet to be
resolved, the Greater Hyderabad Municipal Corporation (GHMC) and South Central Railway (SCR) are at loggerheads over the payment of service charges.

While the municipal corporation has been demanding that the SCR pay Rs
7.77 crore per annum towards service charges (a form of property tax)
for 88.22 lakh square feet area of railway property, the SCR has been
seeking exemption from such charges and claiming that it need not pay
any tax to the civic body.

“We have slapped notices on the
Railways for payment of service charges for the past two years, which
comes to be about Rs 16 crore. But till date, SCR has paid Rs 3.33 crore
as a part payment for the last year and has proceeded to dispute the
charge being levied by GHMC,” a senior official of the finance wing said.

However, the GHMC has given SCR one week’s time to make part payment of
the demand or face action. The corporation decided to collect service
charges from SCR from 2011 after the Supreme Court
gave a ruling in a case pertaining to the payment of service charges by
the central government departments to urban local bodies in November
2009. Based on the SC order, the Centre issued a circular asking all
central government offices to pay service taxes to the respective urban
local body since no property tax was being collected from them.

Official sources said that the civic bodies could collect service
charges equivalent to 75% of property tax paid by private persons if all
services, being provided by the civic bodies, were availed by the
central government departments. In case of internal colonies, which do
not directly avail civic services within the area and are
self-sufficient, the charges are restricted to 33% (one-third) of normal
property tax. If only partial services are availed, they have to pay
50% of property tax applicable to private properties.

Since
many offices like Rail Nilayam, railway stations such as Secunderabad
railway station, Nampally station and MMTS stations are located on major
roads, the civic infrastructure is being used by the Railways. The GHMC
is asking them to pay 75% of general property tax rates in the
respective areas. But, corporation officials claim that the Railways
initially agreed to pay only 33% of the property tax and are now seeking
complete exemption from the charges.

As there is a
disagreement on the payment of service charges, last year a three-member
mediation committee was constituted by the state government to settle
the issue. But on that too, there was no consensus as the civic body
wanted SCR to pay up a certain sum before the meeting which the latter
refused to pay.

“SCR has been given one week’s time to make
part payment of the demand or face action. The civic body can initiate
action against central government departments defaulting service charges
if the mediation fails,” GHMC commissioner MT Krishna Babu told TOI.

For box:

Since many offices like Rail Nilayam, railway stations such as
Secunderabad, Nampally, and MMTS stations are located on major roads,
GHMC has been demanding SCR to pay service tax for using civic infrastructure

SCR was told to pay Rs 7.77 crore per annum towards service charges (a
form of property tax) for 88.22 lakh square feet area of railway
property in the GHMC limits, but SCR sought exemption from such charges

GHMC has been demanding service charges from SCR based on ruling by
Supreme Court in a case pertaining to the payment of service charges by
the central government departments to urban local bodies in November
2009

As there is a disagreement on the payment of service
charges between GHMC and SCR, a three-member mediation committee was
constituted by the state government to settle the issue last year.