Foreign embassies located in the heart of the city will now have to cough up money, for the ‘services’ that they have been enjoying all this while, for free.
According to sources, the New Delhi Municipal Council (NDMC) has received an ‘in principle’ approval from the Ministry of External Affairs (MEA) to levy a ‘service charge’ on foreign embassies located in areas under its jurisdiction.
All foreign embassies are exempted from paying property tax under international conventions but a service charge can be collected.
The civic agency is finalising the amount the embassies need to pay under the unit area method of computation.
“The standing committee on audit had asked us to consult the MEA regarding countries that are liable to pay service charge. A list was sent to us by the protocol department of MEA that showed the countries that take service charges from our embassies on their territory, and those that don’t. Based on that we have computed the amount embassies need to pay us. We will be sending the list to MEA,” said a senior NDMC official.
On average, each embassy will have to pay Rs 10-15 lakh as ‘service charge’ to the civic agency, per year, which can go up depending on the size of the building.
The civic agency is hoping to earn Rs 10-15 crore from this exercise. The officials added that the charges would be levied on a reciprocal basis, which means that embassies of only those countries will be levied a ‘service charge’ that have been charging the same from Indian embassies.
According to NDMC, while the embassies are sent bills for water, electricity and sewage, they are not charged for services like street lighting maintenance, road maintenance and garbage collection. However, a number of Indian embassies are levied a service charge for the same in a number of countries.
“Many Indian embassies pay service charge. So, embassies located in India should also pay. Foreign embassies occupy the best land in the country and are provided the best services too. They need to pay for that,” said a senior official from MEA, who did not wish to be named.
The foreign embassies, along with state and central government offices, occupy about 80 per cent of the council’s area. The NDMC spends more than Rs 500 crore every year on services rendered in these prime areas. In return, the NDMC gets only Rs 200 crore per year from property tax on colonies. It also raises revenue through licences to markets and interest on bank deposits.