MC's failure to collect tax costs the public nearly Rs 3 cr | chandigarh | Hindustan Times
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MC's failure to collect tax costs the public nearly Rs 3 cr

chandigarh Updated: Sep 12, 2013 10:13 IST
Hillary Victor

The Chandigarh municipal corporation's negligence has cost nearly `3 crore to the public, as the civic body failed to collect service tax from 2011 to 2013 and is now having to pay the money from its exchequer to the central excise and service tax department. MC Commissioner Vivek Pratap Singh has sought an explanation.

The MC collects service tax on leasehold commercial property (plots, buildings, eating joints and petrol pumps), on festival stall charges, revenue from the craft centre, cable operators, telephony signal towers, rent of taxi stands, the car bazaar, ground rent, the apni mandis, community centres and advertisement space.

For the two years, the MC was thus supposed to collect `2.5 crore, but collected only `35 lakh. There is a shortfall of `2.43 crore and nearly `50,000 as interest for late payment.

Speaking to HT, Deshraj, MC chief accounts officer, said, "As the MC commissioner has sought an explanation, accountability will be fixed on the part of the defaulting official. Also the, interest could have been avoided if the service tax was deposited online from October 2012 onwards."

The central excise and service tax department sent various showcause notices to the MC for non-payment of service tax since 2007 to the tune of nearly `7 crore, but till date the MC has paid them only `35 lakh.

A senior official of MC said, "We have hired a tax consultant, who has made a submission to the central department that the figure of `7 crore is not correct as there are various types of revenue that do not come under the purview of service tax. The consultant has advised the MC to pay `2.93 crore."

The notification issued by the government states that all lessees of commercial property auctioned since July 1, 2007, are bound to pay service tax at the rate of 12.36 per cent per year on the lease money/ground rent charged by the estate office.