The Hindu        18.01.2011

MCD may not hike property tax

To ensure that Delhiites are not overburdened, the Standing Committee of the Municipal Corporation of Delhi is planning to reject the proposal for property tax hike in residential areas in the budget finalisation meeting to be held on Wednesday.

According to sources, while the residential areas would be spared property tax increase, the commercial areas would have to shell out more as the civic body plans to accept the proposal made by the Delhi Government-constituted Municipal Valuation Committee (MVC) for a steep hike in property tax for such areas.

MCD Standing Committee chairman Yogender Chandolia said: “We had increased property tax last year and so we have decided not to increase it this year. However, we would be accepting the suggestion made by MVC.”

The MVC had planned to make five-star hotels, high-end schools and other such properties independent of their geographical location, which means that although would have to shell out as much tax as properties in posh colonies pay.

The Hindu       14.01.2011

Even post offices must pay service tax, BBMP tells court

The Bruhat Bangalore Mahanagara Palike (BBMP) on Thursday submitted to the Karnataka High Court that Central Government establishments, institutions, undertaking and offices were exempt from paying only property tax and not service tax.

The BBMP said it was not charging or levying property tax on any Central Government undertaking or office. “However, we are levying and collecting service tax on the services we render,” the BBMP said.

The BBMP made these submissions when a Division Bench comprising Justice V.G. Sabhahit and Justice B. Manohar was hearing an appeal by the civic body against a single judge order of September 2010. The judge had set aside the BBMP action in levying service tax on the Department of Posts, Mahalakshmipuram, Bangalore.

The single judge had held that post office, as per the definition of the Bangalore Development Authority (BDA) Act, 1976, was a civic amenity and that no tax or charge may be imposed on it by the State Government or its agencies.

The BBMP, in its appeal, said it had issued a notice on April 12, 2005 to the Department of Posts, asking it to pay 25 per cent of the property tax as service charge. The Department of Posts, it said, had challenged the notification saying the service charge was nothing but tax and that all Central installations were exempt from paying it.

The BBMP argued saying that it was not levying tax but charging for services it rendered such as supplying water, providing roads and drains and removing debris and garbage.

It said even the Karnataka Municipal Act had been amended providing for charging of service tax. It urged the Bench to quash the single judge order.

The Bench admitted the appeal and adjourned further hearing of the case.