Traders will soon pay commercial property taxes based on the type of businesses they run and not on prevailing circle rates as the Uttarakhand government, with an eye on elections, has finalised rules in this regard.
As per the new rules, commercial properties will be divided into 10 categories based on the usage and location of a building and the type of business it houses.
Businesses will be required to pay tax in multiples of the house or property tax levied on residential properties by local bodies.
“The rules have been finalised and sent to the legislative wing for vetting after which it will be placed before the state cabinet for approval,” Nitin Singh Bhadauria, additional secretary of the urban development department, told HT.
The government had agreed to review the circle rate-based method last year after protests by traders, but came up with a plan only now in a bid to woo them ahead of the election.
Once implemented, urban local bodies will levy the new taxes.
Bhadauria said the new rules will pave way for rationalisation of tax based on the volume of the business, making the process equitable, ultimately increasing revenue.
Last year, various fronts of the business community in Dehradun had protested against the circle rate-based tax, and called for an alternative. Traders from other cities too joined the protests.
Following months of agitation, chief minister Harish Rawat in December last year formed a committee to resolve the matter. The panel was asked to study the tax norms, hold hearings with all the stakeholders concerned and submit its report within 15 days.
The opposition BJP, meanwhile, has targeted the Congress government, accusing it of delaying the new tax system eyeing the 2017 elections.
“The (Congress) government kept pushing the matter so that it could exploit it right before the elections,” alleged a senior BJP leader who is also a functionary of the regional business association.
The business community is considered a traditional vote bank for the saffron party.