Urban News

The Deccan Herald  09.12.2010

HC allows local bodies to tax mobile phone towers

Bangalore, December 8, DHNS:

In a judgement that could push up revenue of urban and rural local bodies in the State, the High Court has allowed local bodies to levy taxes on mobile telephone towers after amending existing taxation rules.

Partly allowing a batch of writ petitions filed by Hutchinson Essar South Ltd and others, Justice H N Nagmohan Das has held that the private mobile operators have to obtain licence from the local bodies under the relevant enactments for erecting mobile phone towers.

Further, the court has directed the petitioner's companies to pay a sum of Rs 12,000 per year per mobile phone tower as tax to the local bodies.

“The same is subjected to amendment of taxation rules by the local bodies,” the court said.

Provisions of KMC Act

"Once the mobile companies install 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 constructed within the limits of the local bodies, they can levy and collect taxes as per provisions of enactment and rules. Therefore, it is needless to say that the petitioner company is liable to pay taxes to local bodies as per the provisions of rules", the court observed.

The Bench further pointed out that the BBMP has amended the rules relating to assessment of buildings in the City limits. “Under these rules, the BBMP can levy taxes on mobile towers at Rs 12,000 per year per tower. It can make amendment to the Karnataka Municipal Corporation and Panchayatraj rules. Until then the local bodies are at liberty to adopt the rules framed by the BBMP in the matter of levying taxes on mobile towers."

The petitioners’ company had challenged the demand notice issued by the various urban local bodies in the State demanding the payment of tax towards mobile phone towers.
Challenging the levy, the petitioners had stated that under the Karnataka Municipal Corporation Act and Karnataka Panchayatraj Act, there is no provision to levy the taxes on mobile phone towers.

Submitting that they are installing the towers on private properties after obtaining necessary permission by way of license, the petitioners contended that the provisions of KMC and Panchayataraj Act do not specify the levy and collection of the annual permission fee and installation charges of mobile phone towers.

The Pioneer  09.12.2010

Staff Reporter | New Delhi

While presenting the deficit budget estimate of Rs 117.15 crore, Municipal Commissioner KS Mehra on Wednesday proposed five per cent hike in property tax rate in the Capital for each category for 20011-12. Citing couplets from magnum opus ‘Raghuvansham’ authored by Kalidas, he justified the proposed increase and said tax is to establish balance between administration work and social welfare.

“It was only for the prosperity and welfare of the people that he (the king) took tax from them, just like the sun drawing moisture (from the earth) to give it back in thousand fold measure (as beneficial rain),” he said during his 90-minute Budget speech in special Standing Committee meeting.

However, soon after the budget speech, Standing Committee Chairman Yogender Chandolia rejected outright the proposal to increase taxes. He asserted that even a debate will not be held on the issue. On the other hand, Mehra seemed to be confident. He said he would convince the deliberative wing of the civic body to approve the planned augment in the rate of the property tax.

Earlier in his speech, Mehra said earned revenue would be mainly spent on green initiatives, roads, parking projects, education and to improve facilities in hospitals. The priority is to provide better public facilities in Delhi, he added.

The top official of the civic body added with the enhanced revenue, best international practices will be implemented for better financial, debt and expenditure management, personnel training scheme. “Our aim will be optimal utilization of limited resources available,” he said.

The Municipal Corporation of Delhi (MCD) proposed to increase tax rates for residential properties from existing 12 per cent to 17 per cent for A and B categories, from 11 per cent to 16 for C, D and E categories and from seven per cent to 12 per cent for F, G and H categories. The MCD has divided properties into eight categories on the basis of areas where they are located. Five per cent hike has also been mooted for residential properties of Government companies and statutory corporations, non-residential properties of all categories and residential farmhouses.

No change is proposed for special non-residential properties, like three-star hotels and above, malls, AC gyms and clubs with swimming pools, as they are already giving the highest possible 20 per cent tax, Mehra said.

“The property tax rates are proposed to be increased by five per cent uniformly in all categories except for Airport Authority of India properties, non-residential farmhouses and special non-residential properties,” he said.

The Commissioner also said that the rebate on timely payment of tax is proposed to be reduced to 10 per cent from 15 per cent and there will be no additional rebate on properties up to covered area of 100 sqm, co-operative group housing societies and aided schools.

Mehra said with the proposed increased in property tax rate, the civic body is expected to earn Rs 570 crore. “We are expecting to get Rs 100 crore with the five per cent hike in property tax rate. After implementation of the recommendation of 3rd Municipal Valuation Committee, the Corporation will earn Rs 370 crore and if arrears are settled this year, it will earn Rs 100 crore,” he said.

At present, only 9.5 lakh properties are under the ambit of property tax in the city against 25-30 lakh properties. Mehra said in the coming fiscal, the MCD is also targeting to widen its tax net and will attempt to bring nine lakh more properties under it.