The New Indian Express 02.03.2010
C&AG raps City Corporation
The C&AG report, which was tabled in the Assembly on Monday, has said that the revenue loss of Rs 19.68 crore was incurred during the period from 2001-02 to 2007-08. Owing to the shortfall in collection of property tax, there was also a reduction in the collection of library cess to the tune of Rs 98.44 lakh. Though it was brought to the notice of the government in October 2008, it has not given any reply till May 2009.
The Kerala Municipalities Act of 1994 stipulates that the government may by notification unite the territorial area of panchayats geographically lying adjacent to a municipal area with the municipality. It also states that when any village, panchayat area is constituted as, or included in a municipality, all taxes, fees or other charges levied in that area under the enactment or regulation then in force shall, from the date of constitution or inclusion, as the case may be, cease to have effect and all such taxes, fees or other charges shall be levied in that area in accordance with the provisions of this Act and the rules, regulation and by-laws made thereunder.
The rate of property tax prevailing in the areas of Thiruvananthapuram Municipal Corporation is 18 percent of the Annual Rental Value (ARV). The grama panchayats of Attipra, Kadakampally, Ulloor, Nemom and Thiruvallom were annexed to the Corporation with effect from October 1, 2000. The property tax levied in these panchayats was six percent.
According to the provisions of the Act, the property tax should have been levied at the prevailing rate of 18 percent so as to have a uniform rate in all areas falling within the Corporation.
The report said that the Corporation had recommended to the government to retain the existing rate of property tax (6 percent) in the annexed areas till the next general revision of tax so as to avoid hardships to the people and to avoid unnecessary public agitations. The government agreed to this proposal.
The Standing Committee of the Corporation, in 2003, had recommended to bring about uniformity in the rates of property tax. But the council had not so far decided on the issue. Thus, out of 86 divisions in the Corporation, property tax was collected at the rate of 18 percent of ARV in 50 divisions and six percent in the remaining 36 divisions in violation of the Act. Owing to the adoption of non-uniform rates, there was a revenue loss of Rs 19.68 crore, the report said.
TRANSACTION AUDIT
The C&AG has found that the Thiruvananthapuram Municipal Corporation lost Rs 1.83 crore allotted in March 2007, owing to delay in the reconciliation of accounts with that of District Treasury.
The government allotted Rs 1.83 crore to the Corporation under General Purpose Fund. Even though the Corporation was in receipt of government sanction, it did not initiate timely action to get the amount credited in its account.
The failure in internal control mechanism in carrying out timely reconciliation of accounts and follow-up action by the Corporation resulted in a loss of Rs 1.83 crore, the report said.
