The New Indian Express 09.12.2010
City hostels to pay commercial tax soon
Until recently, the GHMC treated them as residential properties and was reportedly making a loss of Rs 2 crore annually.
With many guest houses and hostel sprouting throughout the city, it has become a booming commercial business.
Almost all run to full capacity, with students coming from different parts of the state and from other places to pursue higher studies or work in the city.
Hence, owners are making a killing by charging heavy monthly rentals.
As the GHMC was getting peanuts in form of property tax from hostels and guest houses, it has decided to tax them under the commercial category.
Earlier, the corporation did not have data about the number of hostels or guest houses.
The GHMC took up a survey recently to identify these establishments in five zones. They have identified some 1,187 hostels in all five zones.
Officials said the same process for guest houses would take some time as most are difficult to identify, as they look similar to BHK flats.
The officials added these guest houses were nothing but posh flats rented out to people.
Owners were letting them out to IT professionals and people working in other major companies, whose monthly salaries were high and who could afford to live in such luxury.
Last month, the GHMC assessed some 122 hostels, resulting in increased revenue of Rs 54.5 lakh.
It is expecting that after assessing the rest, another Rs 1.5 crore revenue would be generated.
