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Taxation

Mobile towers to ring in revenues for state

Thursday, 09 December 2010 10:22 administrator
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The New Indian Express  09.12.2010

Mobile towers to ring in revenues for state

BANGALORE: In a judgment that could have far reaching consequences and boost revenues of local bodies, the High Court has allowed local bodies in the state to levy taxes on mobile towers after amending the existing taxation rules.

While partly allowing a batch of writ petitions filed by Hutchinson Essar South Ltd and others, Justice HN Nagmohan Das held that private mobile operators have to obtain a licence from local bodies under the relevant enactments for erecting mobile towers. If they have already erected towers, then they have to be regularised. The local bodies have to consider them in accordance with the law keeping in mind public safety and health, the court said.

Further, the court has directed the petitioner companies to pay a sum of Rs 12,000 a year per mobile tower as tax to the local bodies subject to amendment of taxation rules by the local bodies.

The petitioner companies had challenged the demand notice issued by various urban local bodies in the state demanding payment of tax towards mobile towers.

The petitioners stated that the Karnataka Municipal Corporation Act and Karnataka Panchayat Raj Act have no authority to levy taxes on mobile towers.

The petitioners were erecting and installing towers on private properties after obtaining necessary permission by way of licence. They further contended that the provisions of KMC and Panchayat Raj Act do not specify the levy and collection of annual permission fee and installation charges of mobile towers, so local bodies are barred from levying and collecting any fee to erect mobile towers.

"Once the mobile companies erect mobile towers within the limits of local bodies by obtaining permission from them, they fall under the definition of the word 'building'. If a building is erected within the limits of the local bodies, they are empowered to levy and collect taxes according to the provisions of enactment and rules,'' the court observed.

"The BBMP levies taxes on mobile towers at `12,000 a year per tower. Till an amendment is made in their rules, local bodies are at liberty to adopt rules framed by the BBMP for levying taxes on mobile towers," the court held.

Last Updated on Thursday, 09 December 2010 10:24
 

MCD proposes 5 per cent hike in property tax; BJP, Cong disagree

Thursday, 09 December 2010 10:17 administrator
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Indian Express     09.12.2010

MCD proposes 5 per cent hike in property tax; BJP, Cong disagree

Express News Service Tags : Municipal Corporation of Delhi, budget estimate, civic agency Posted: Thu Dec 09 2010, 02:38 hrs

New Delhi:  The Commissioner of the Municipal Corporation of Delhi (MCD) presented the budget estimate for the civic agency on Wednesday, proposing a five-per cent increase in property tax across all categories.

The proposal was, however, immediately shot down by the BJP, which controls the MCD. “As the chairman of the Standing Committee, I reject the proposal to increase the house tax,” said Standing Committee chairman Y S Chandolia. Rejection also came from the Congress members, with leader of Opposition in MCD J K Sharma claiming that the move will only result in an extra burden on “honest” taxpayers.

The MCD has divided its properties in eight categories — A, B, C, D, E, F, G and H. Under the new proposal, A and B category that use to pay 12 per cent tax will have to pay 17 per cent; categories C, D and E that pay 11 per cent tax will have to pay 16 per cent and categories E, F and G that pay 7 per cent will have to pay 12 per cent taxes.

“MCD has a huge debt of Rs 2,867 crore to pay to the Delhi government. Also it has to generate more income for itself. Hence, the proposal has been drafted,” said Commissioner K S Mehra.

He added Rs 570 crore of extra revenue can be generated if taxes are increased, as proposed by the Municipal Valuation Committee (MVC). Mehra said the MCD has received Rs 970 crore as property tax this year and the target for tax collection in the next fiscal is Rs 1,550 crore. The budget proposals were presented at a special meeting of the MCD Standing Committee. The MCD budget for 2010-11 is Rs 6,346 crore. 

Mehra had proposed a five-per cent tax increase during last year’s budget as well, but the Standing Committee revised the proposal and only one to two per cent raise was implemented.

Talking to the reporters later, Chandolia said low property tax is not the reason for MCD’s empty coffers. He, instead, called for better tax collection methods. “There are 30 lakh properties under MCD that are required to pay taxes, but only 9 lakh property owners pay up. There are 4,816 properties, which have already been identified and are liable to pay Rs 5 lakh in tax per year. We can get Rs 712 crore if these properties are targeted,” he said.

Mehra, meanwhile, told reporters that the MCD is serious about getting more properties under its tax net. He added that the MCD is intensifying its efforts to widen the tax base and wants the Standing Committee to accept MVC’s recommendations, which had suggested bringing more properties under Category A.

About other revenue earning measures, Mehra said the MCD has nearly finalised a new outdoor advertisement policy. It has also identified 126 new sites for unipoles and 325 new sites for wall or building wraps for ads.

The Commissioner also said the MCD has earmarked Rs 141 crore for rural development projects, initiated measures for e-governance and paperless administration and is setting up a data centre at its Civic Centre building for creating software.

 

Games spending and lower tax collection burn hole in MCD pocket

Thursday, 09 December 2010 08:33 administrator
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The Times of India       09.12.2010 

Games spending and lower tax collection burn hole in MCD pocket

NEW DELHI: It seems that Municipal Corporation of Delhi (MCD) is reluctant to learn from its past mistakes. Second year in a row, the civic agency has presented a deficit budget but despite losses it has failed to draw up a concrete plan to boost its sagging revenue.

It came up with a proposal to increase property tax in residential areas but it was shot down by the political-brass which wants more people to be brought under the tax net something the civic body has been unsuccessfully planning to do for years.

The income as per the revised estimate 2010-11 is Rs 6104.70 crore as compared to a budget estimate of 7011.44 crore while the expenditure is Rs 6112.11 crore as compared to an estimate of 6872.84 crore. In fact, the proposed budget estimate for 2011-12 also reveals that the income 6247.28 crore remains lesser than the expenditure Rs 6364.43. Noting that the MCD is under a debt of Rs 2,867 crore, MCD commissioner K S Mehra on Wednesday said that there is a dire need for improving financial management and increasing revenue.

The huge expenditure incurred during the Commonwealth Games and the declining property tax collections have pushed MCD into a deep pi so much so that it has been struggling to make payments to its staff and carry out basic maintenance work. "We have also not got funds under education and health sectors from Delhi government. This non-payment has made the situation far worse,'' said an official.

Even as it battles a fund crunch, MCD is not likely to meet its target of property tax collections this financial year though this is the main source of revenue for the civic agency. MCD had expected to collect Rs 1555 crore as tax this year but is only going to manage Rs 1050 crore. "We expect to collect Rs 518 crore this year,'' said an MCD official, who claimed that a survey of properties was being carried out to get more people under the tax net.

According to Mehra, around nine lakh more people are likely to come under MCD's tax net by next year. "A survey is being carried out by the domestic breeding checkers and we are also getting data on properties from discoms. This data will be correlated with data given to us by Survey of India. There are around 30 lakh properties in Delhi out of which only 9 lakh pay tax to us. We hope to bring 9 lakh more properties under the tax net. A unique identification number is given for each property paying tax, this will further help us in our collections in the future,'' said Mehra.

Meanwhile, according to MCD, dishonoured cheques continue to be a problem. "We could not make collections worth Rs 38.26 crore because 36,362 cheques bounced,'' added an official.

While MCD's collections from advertisements have improved this year, the collections from car parking are dismal. Mehra said: "MCD has nearly finalised a new outdoor advertisement policy. It has also identified 126 new sites for unipoles and 325 new sites for wall or building wraps for advertisements and is securing revenue shares from DDA, PWD and other departments.'' The main expenses by MCD continue to be on public works engineering and sanitation.
 
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