Top builder owes Mumbai civic body Rs156 crore in property tax
Kohinoor Planet is yet to clear Rs28.04 crore in dues, followed by Sahara Hospitality and Lokhandwala Kataria Construction Private Limited with dues of Rs4.87 crore and Rs3.78 crore.mumbai Updated: Aug 10, 2017 01:16 IST
Even as the Brihanmumbai Municipal Corporation (BMC) is facing a loss in property tax collection, many builders in the city are its biggest defaulters.
According to the data accessed by HT, the Housing Development and Infrastructure Limited (HDIL) owed BMC Rs155.93 crore at the end of 2016-17. Kohinoor Planet is yet to clear Rs28.04 crore in dues, followed by Sahara Hospitality and Lokhandwala Kataria Construction Private Limited with dues of Rs4.87 crore and Rs3.78 crore.
The BMC plans to auction properties of defaulters if they fail to clear their dues. In his budget speech, civic chief Ajoy Mehta’s said the BMC had collected only Rs3,629.58 crore in property tax as against it target of Rs5,400.41 crore in 2016-17.
The Shiv Sena recently passed a resolution waiving property tax for houses with a carpet area of up to 500 square feet and giving concession to owners of houses between 500 square feet and 700 square feet. This is likely to result in a loss of Rs600 crore to the BMC. Sarang Wadhawan, vice-chairman and managing director of HDIL, said, “In case of some of the properties, the societies have already been formed but the transfer cards are yet to be issued. So the property bills are in the name of HDIL when it has to be ideally paid by the societies.”
Senior civic officials confirmed that despite several notices, the BMC has not received the dues yet. A senior civic official said, “In some cases, we are restricting action as these are also slum rehabilitation projects. In case of a default, we impose a 2% penalty, cut water-supply and issues notices to the owners.”
In the case of HDIL, the civic body has issued notices to 17 properties in Bandra (East), one in Bandra (West), one in Goregaon and 13 in Mulund. It is also in the process of cutting water-supply to properties in the Kurla and Bhandup wards.
In another case, the BMC has issued notices to 23 properties of Kohinoor Planet. A representative from Kohinoor said that since the possession of properties has been transferred to the buyers, the notices should be in their names. “However, since there is a delay in transfer, we have been issued notices.”
A representative from Sahara Hospitality said the change in computation of property tax needed redressal. The change also led to the delays, said the representative.The representative said, “Accordingly, the property tax was reassessed. A part of it has already been paid and the rest will be cleared in due course of time.” Despite repeated attempts, representatives of Lokhandwala were unavailable for a comment.
At Rs 14,000 crores, property tax and octroi were BMC’s biggest sources of income until last year. However, with the advent of the goods and services tax (GST), BMC is being compensated by the state government every month. The financial transition also resulted in BMC down-sizing its budget by Rs 11,000 crores in the budget for 2017-18.