The Hindu 30.10.2013
MCC urged to revise property tax next fiscal
Delegation says revision is done every three years; last was in 2011
A citizens’ delegation has urged the Mysore City Corporation (MCC) to give effect to hike in property tax from the next financial year (April 1, 2014).
The delegation led by M. Lakshman, convener, Association of Concerned and Informed Citizens of Mysore and H.V.S. Murthy, advocate and general secretary of Tax Payers Federation, met Chairman of the Standing Committee on Taxation and Finance B.L. Bhyrappa on Tuesday.
They said according to the Self Assessment System (SAS) of taxation, which came into effect in 2005, there would be an automatic increase in property tax every three years. Hence, the revised rate of property tax should be applicable from the next financial year and not April 1, 2013, they said.
In a memorandum submitted to Mr. Bhyrappa, they said as per the SAS , which was introduced based on Section 45(B) of Karnataka Stamp Duty Act, the property tax would be hiked automatically by 15 per cent every three years effective from 2005–2006.
They said the hike was effective in 2005, 2008 and 2011, and hence should next be effective in 2014.
The delegation threatened to approach the High Court of Karnataka against the MCC, in case it approved the hike for the current financial year.
Meanwhile, Mr. Bhyrappa told The Hindu that the revised taxation rate would be given force from the next financial year.
Interestingly, the MCC had projected revenue of over Rs. 93 crore from property tax during 2013–14 in anticipation of the hike in taxation rate. But, it is unlikely that the MCC council will approve it for this year. The council, which met on Monday, did not take up the subject though it was listed in the agenda.
The delegation also urged the MCC to tone up its property tax collection rate and pointed out that it had achieved a target of only 60 per cent of the projected revenue. It was also pointed out that property owners in 12 areas of the city were paying tax less than what was prescribed in the Act, while there were many private layouts that did not pay tax at all.
If the proposed hike is deferred to the new financial year as stated by the Chairman of the Taxation Committee, the MCC will be hard pressed to meet the last financial year’s target of nearly Rs. 78 crore as well.
However, Mr. Bhyrappa said there were more than 32 private layouts and about 40 Mysore Urban Development Authority layouts that were served by the MCC by way of extending civic amenities. “We cannot continue to provide amenities indefinitely without getting revenue by way of property tax, and hence will bring them under the ambit of taxation. In addition, there are many property owners in the city who do not comply with the law and pay tax. We will tax all of them to meet the target,” he added.
The citizens’ delegation suggested that the government departments housed in various buildings be brought under the property tax net. Exemptions could be granted only to service oriented institutions like schools and hospitals. The MCC was also urged to tax industries coming under the MCC limits, though it sought tax concession for senior citizens of Mysore.
