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Taxation

Delhi circle rates to double

Wednesday, 13 October 2010 10:26 administrator
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The Hindu  13.10.2010

Delhi circle rates to double

Special Correspondent

Official notification expected by this month-end
For the first time they are being increased

It is much lower than the rates in Noida, Gurgaon

NEW DELHI: The Delhi Cabinet on Tuesday decided to increase the circle rates -- minimum rates for valuation of land and immovable properties -- by 100 per cent. Ironically, while this may seem too high, it is claimed to be much lower than the rate that had been proposed by the Revenue Department as also the prevailing rates in neighbouring Noida and Gurgaon.

The new rates would come into effect after the notification that is expected by this month-end and would provide a new benchmark for charging stamp duty on the instruments.

The circle rates were first introduced in the Capital in July 2007 and were notified under the provisions of the Delhi Stamp (Prevention of Undervaluation of Instruments) Rules, 2007.

This is the first time they have been increased. However, while even higher rates had been proposed initially, the Delhi Cabinet has decided to settle for a hike of 100 per cent.

Chief Minister Sheila Dikshit, who chaired the Cabinet meeting, said the rates have been increased to reduce circulation of black money in property transactions in Delhi.

“The revision in circle rates will help in curbing the prevailing undervaluation of properties,'' she said.

Though Delhi has also decided to rationalise the rates on the premise that the prevailing rates in the neighbouring township of Noida in Uttar Pradesh and Gurgaon in Haryana are now much higher with the respective State governments hiking them regularly, the decision has brought little cheer to the tax payers.

“The circle rates that have been approved continue to be much less than the prevailing market rates. Moreover, while the Revenue Department had proposed much higher rates to reduce the play of black money in the property market and this proposal had also found favour in a Cabinet meeting on June 14, the new rates that have been announced are diluted. This would only help those with black money and reduce the prospective revenue of the Delhi Government,'' said an official.

Prior to the Cabinet's latest decision, the circle rates based on the Municipal Corporation of Delhi's categorisation for the residential Property Tax were Rs.43,000 per square metre for Category-A, Rs.34,100 for Category-B, Rs.27,300 for Category-C, Rs.21,800 for Category-D, Rs.18,400 for Category-E, Rs.16,100 for Category-F, Rs.13,700 for Category-G and Rs.6,900 for Category H colonies.

The new rates would now go up by Rs.6,900 per sq.m. to Rs.43,000 per sq.m. but this would still be much lower than the hike of Rs.9,000 to Rs.125,000 per sq.m. initially proposed.

“People desirous of buying property in Delhi by taking bank loans would suffer due to this. On the other hand those with black money would be able to register properties by paying lower circle rates,'' said a property dealer.

For the Delhi Government, the new rates would mean a substantial loss in revenue from what could have been earned through the original proposal.

“The expected revenue from property registrations for the year was around Rs.1,500 crore and out of this Rs.800 crore has already been earned. The implementation of the proposed rates would have resulted in additional revenue of over Rs.500 crore.''

Last Updated on Wednesday, 13 October 2010 10:27
 

GHMC eyes RTA vehicle tax

Tuesday, 12 October 2010 11:25 administrator
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The Times of India              12.10.2010

GHMC eyes RTA vehicle tax

HYDERABAD: With maintenance and laying of roads becoming a major financial burden, the cash-strapped Greater Hyderabad Municipal Corporation (GHMC) is eying a pie in the Rs 500 crore life tax being collected by the Regional Transport Authority (RTA).

The corporation has sought Rs 350 crore every year as its share from the nearly Rs 500 crore revenue earned by RTA in the form of vehicle tax.

Corporators have begun efforts to ensure GHMC gets its due share in the vehicle tax and decided to pass a resolution in the forthcoming council meeting.

Also, GHMC commissioner Sameer Sharma has written a letter to the principal secretary, Municipal Administration and Urban Development (MA&UD) department, recently seeking directions to tap those funds.

GHMC officials claimed as per the Hyderabad Municipal Corporation (HMC) Act, 1955, and Rules 1965, the civic body has the right to collect tax on vehicles, animals and boards. However, for the past few decades, the RTA has been collecting tax on the directions of the state government and paying only Rs 60 lakh per annum to the corporation towards its share.

In 2009-fiscal, the RTA had collected Rs 500 crore towards vehicle tax and other charges, but it paid only Rs 60 lakh and that too in four quarters, the officials said.

"When the amount was fixed in the late 80s, the civic body's jurisdiction was limited and road maintenance expenditure was meagre. Now, the regular maintenance expenditure (repairs) of roads has increased to Rs 250 crore every year and another Rs 100 crore is being spent on road laying and formation," an engineering official said.

The GHMC has also lined up several projects worth Rs 790 crore for the next five years, which includes upgrading road infrastructure facilities of 44 roads at an estimated cost of Rs 500 crore (Rs 100 crore per year), road widening works worth Rs 40 crore every year for the next five years, and road making and traffic signals worth Rs 90 crore (Rs 18 crore per year).

For taking up the special project related to roads, the GHMC has to spend Rs 158 crore every year, the commissioner said in the letter.

The GHMC has also sent a detailed note on the financial condition saying that revenue surplus of the corporation in the last financial year was just Rs 195.42 crore which cannot be used for all the development works. The corporation had already availed Rs 500 crore overdraft from banks.

When contacted, GHMC additional commissioner (Finance) S Hari Krishna admitted that a letter was sent to the state government recently for enhancement of vehicle tax. "Last year, the late chief minister YS Rajasekhara Reddy had directed RTA for enhancement of the vehicle tax share to Rs 158 crore during a review meeting, but it was not implemented," he said.

 

PMC appoints retd judge R N Bapat as arbitrator

Tuesday, 12 October 2010 11:19 administrator
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The Times of India        12.10.2010

PMC appoints retd judge R N Bapat as arbitrator
PUNE: The standing committee of the Pune Municipal Corporation (PMC) on Monday appointed retired high court judge R N Bapat as special arbitrator to hear its pending property and water tax court cases and settle disputes.

"The civic administration proposed the name of retired high court judge R N Bapat as the special arbitrator," said standing committee chairman Arvind Shinde.

Shinde added that there are nearly 210 unsettled property tax cases which have caused revenue loss of Rs 51 crore. "There are also many pending water tax cases, with dues worth Rs 210 crore. Appointment of an arbitrator is aimed at saving time by settling matters outside the court. The arbitrator will mediate between the disputing parties," said Shinde.

According to the standing committee decision, Bapat will be given a contract of eleven months with a monthly payment of Rs 22,000 to hear prolonged court cases and to settle property tax disputes. He will also get an additional amount for hearing cases of water tax.

In 2006 Bapat was given the task of settling 65 property tax disputes resulting in a recovery of Rs 2 crore for the PMC.
 
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