Indian Express 30.06.2010
MCD misses property tax target
Express News Service Tags : MCD property tax target, delhi Posted: Wed Jun 30 2010, 01:23 hrs
New Delhi: Already struggling with near-empty coffers, the Municipal Corporation of Delhi now has another reason for worry. The civic agency was aiming to collect around Rs 400 crore as property tax by June 30, but till Tuesday it had raked in only one-third of the amount.June 30 is the last day for payment of due property tax in the first quarter of the 2010-11.
Tax collection from commercial units has been one of the concern areas for the Property Tax department this year. The department is battling “short payments” from many quarters, specially guesthouses in Paharganj and Karol Bagh that have refused to pay tax dues in accordance with the new rates imposed by the MCD in the current fiscal.
As per the new rates, rented and self-owned luxury commercial properties are to compute their due tax amounts at the rate of 20 per cent and 15 per cent respectively. In the last fiscal, the rate was 10 per cent. The increase was was introduced in the MCD’s budget estimate in January this year and later approved by the Corporation.
Most of these commercial units, however, continue to pay taxes at the previous rate.
These “luxury commercial properties” include air-conditioned guesthouses, starred hotels, malls, air-conditioned gyms, swimming pools and clubs.
Most guesthouse owners in Karol Bagh and Paharganj contend that the tax rate increase does “not apply” to them as their guesthouses are actually “smaller lodges” as mentioned in their operation licences. This has been negated by the MCD, which says that the DMC Act has no provision for licences for lodges and these units are classified as “guesthouses or hotels”, hence, liable to pay the tax at the increased rate.
The civic body is also facing problems such as general laxity on part of the taxpayers, limited manpower for conducting a door-to-door survey to identify eligible payers and realisation of tax, poor enforcement, lack of a ready database of all properties and for rejecting the report of the second Municipal Valuation Committee (MVC) in 2007.
The second MVC report said the civic agency’s revenue can be increased either by enhancing the annual valuation of properties through a raise in tax rates in any or all categories, or increasing the coverage of the tax net. The MVC has highlighted the recommendation again in its third report submitted to the MoUD and the MCD last week.
On Tuesday, Special High-Powered Property Tax Committee Chairman Ved Parkash Gupta also directed all tax payers pay their property tax and avail the benefit of rebates as applicable. He further warned that the Corporation will take stringent action against defaulters, including attachment of immovable properties.
