MCD-DMRC impasse on taxes over
The Municipal Corporation of Delhi (MCD) and the Delhi Metro Rail Corporation (DMRC), the two agencies that were involved in a long-standing row over property and service tax, finally found a common ground.delhi Updated: Jun 22, 2011 00:12 IST
The Municipal Corporation of Delhi (MCD) and the Delhi Metro Rail Corporation (DMRC), the two agencies that were involved in a long-standing row over property and service tax, finally found a common ground.
In a meeting held between the representatives of the two agencies in March, it was decided to divide DMRC's assets that are built on the civic agency's land, into three groups. Each of the divided categories will pay a separate amount assigned to them as service tax.
The property will be divided into essential, commercial 1 and commercial 2 groups, based on their usage. On some of the essential DMRC properties, such as railway lines, yards, and workshop, 5% of the property tax will be paid as service tax. On commercial activities such as malls, etc, the service tax will be 50%, and in commercial 2 group that will include commercial activities on a large scale, 75% will be charged as service tax.
The Delhi Metro has paid MCD a provisional amount of Rs 2.58 crore after the meeting held in March. Earlier, it had paid Rs 37 lakh.
The two agencies were at loggerheads regarding the use of commercial space. In June last year, the MCD had sealed some of DMRCs commercial establishments at the Inderlok metro station. The civic agency had claimed that the station was not paying the requisite charges that it levies on commercial places. It also wanted the DMRC to pay property tax for using its land to build its stations and tracks.
Lieutenant Governor of Delhi had held a meeting in January this year to resolve the issue. "After a detailed discussion, it was decided that service charges shall be payable in respect of various properties of DMRC under three categories. After that MCD and DMRC met again and now DMRC will have to submit a list of properties under it divided into the three categories," said a senior official of MCD.