E-Paper
Cash-strapped Chandigarh MC withdraws property tax rebate for govt buildings
The civic body started levying property tax (also known as service tax when being charged from government buildings) yearly on government buildings and commercial buildings with effect from November 22, 2004; there are around 30,000 commercial units (non-residential properties) in Chandigarh, including government buildings, falling within MC limits
After Punjab governor and UT administrator Gulab Chand Kataria refused to release any ‘special grant’ to Chandigarh municipal corporation (MC) and directed officials to increase its own revenue, the Aam Aadmi Party (AAP) and Congress-led House of the civic body on Tuesday withdrew the 25% rebate in service tax, being levied on the government buildings annually.
The civic body started levying property tax (also known as service tax when being charged from government buildings) yearly on government buildings and commercial buildings with effect from November 22, 2004. There are around 30,000 commercial units (non-residential properties) in Chandigarh, including government buildings, falling within MC limits. The property tax on residential land and buildings, also known as house tax, was imposed from 2015-16 onwards, except for properties with a covered area of less than 500 sq ft. A total of 1,08,372 residential properties in the city are charged property tax at a fixed-rate.
As per MC House, even after being given a 25% rebate on service tax every year, the government failed to pay the tax, due to which commercial and government buildings alone owe the corporation a whopping ₹250 crore in property tax/ service tax, which is a major source of its annual revenue. However, from the total amount, ₹187 crore remain in litigation or are disputed. Besides this, the residential buildings also owe ₹15.8 crore to the corporation.
The list of defaulters (which were getting the rebate) runs long, with around 650 buildings of the Punjab, Haryana, Himachal Pradesh and central governments in Chandigarh. Even the UT administration is yet to clear their tax dues. Other major defaulters including Panjab University (PU), PGI, Punjab Engineering College (PEC) were not given rebate as they are autonomous institutes.
“If poor residents can pay their 100% tax, why does the government need a rebate of 25% on its taxes? If MC can cut water connections of residential properties which are not paying tax, then take strict action on government buildings too,” said councillors while approving the withdrawal in rebate.
“Keeping the governor’s sentiments in view and looking at MC’s financial health, we are proposing that the service tax levied on all government buildings may be raised at par with commercial/residential buildings. Also, the arrears should be recovered from them and stringent action should be taken on tax defaulters,” the councillors said in the agenda.
This proposal and decision will only be implemented if final approval is given by the UT administration.
In reality, property tax recovery remains a challenge, as MC only has two remedies under the tax bylaws framed under the Punjab Municipal Corporation Act as extended to the UT. For starters, it can serve notices to defaulters and thereon, proceed with sealing the property in question if dues remain unpaid- a provision hard to implement on ground. But, MC seems impotent to seal institutes like PGI, PU or other UT buildings.
Municipal commissioner Amit Kumar said, “A meeting has been called for all these defaulters and strict action will be taken against them without any laxity. We are strategising plans for recovering the arrears. We will also study in detail about the property tax bylaws and draft new rules soon.”
“As per MC Act, the UT administration has to give whole, or a part of, stamp duty on sale of properties, electricity duty, entertainment fee and road tax, to MC. We should legally examine the law and ask the UT administration to give MC its rights”, said BJP councillor Saurabh Joshi, adding that a white paper is demanded on the complete expenditure on Chandigarh Smart City projects, in the next House meeting, to review the ‘leakages’.
Congress councillor Gurpreet Gabi demanded strict action against water bill defaulters and sale of a few MC’s properties as a ‘short-term’ solution to the financial crunch.
Besides revocation in service tax rebate, Congress councillor Gurbax Rawat said as per MC Act, the corporation should get profit shares from the Registering and Licencing Authority if UT can’t transfer it to MC. “MC maintains city roads but UT gets the road tax and profits from RLA,” she said.
Another Congress councillor, Taruna Mehta, demanded a review on advertisementpolicy and suggested that revenue should be collected from advertising on roundabouts, public transport, bus queue shelters, and boards displayed outside shops and commercial buildings.
AAP councillor Yogesh Dhingra suggested that the civic body should not provide discounts in the booking fees for community centres to people who can easily afford them.
Leader of opposition Kanwarjeet Rana said, “MC should cancel the licences of vendors not paying fee. BJP is also ready to visit the UT administrator with councillors of all parties, and request him for special aid to resume pending works.”
Senior deputy mayor Kuljeet Singh said, “The municipal corporation should rent out its properties across the city and erstwhile villages as they are lying vacant since years. Good revenue can be collected from these properties.”
Meeting halted for hour over remarks on nominated councillor
A heated argument broke out between AAP councillor Prem Lata and nominated councillor Geeta Chauhan when Prem Lata remarked “Akal Nahi, Shakal Nahi (No brain and no beauty)” at Geeta. The comment invited a strong protest by BJP councillors and nominated councillors, who demanded an apology from Prem Lata. “This is a remark on the SC community,” the councillors said. They protested in the well of the House and the mayor had to announce a ’10-minute tea break’. But, the protest continued for an hour until Prem Lata finally apologised. Mayor Kuldeep Kumar Dhalor said, “This was a personal comment and not on a community. However, even personal comments should not be done on any councillor.”
All agendas deferred as new commissioner to examine
Municipal commissioner Amit Kumar attended his first general House meeting on Tuesday. MC’s agenda of celebrating Rose Festival with ₹1.11 crore was objected by councillors saying the festival should be seen as a ‘revenue generating opportunity’ instead of spending crores. Kumar said the agenda can be deferred as he too will come up with and share better ideas. The agenda of change in recruitment rules of fire and rescue services was also deferred after Kumar said he needed some time to study the rules in detail. Kumar, a 2008-batch Punjab cadre IAS officer, took charge as the new municipal commissioner of Chandigarh on October 21.
