Traders meet New Delhi civic body over ongoing sealing in Connaught Place

Connaught Place traders met NDMC vice-chairman over shop sealing for tax non-payment, advocating for uniform tax assessment method. NDMC to pursue matter further.

The Connaught Place traders on Sunday met New Delhi Municipal Council (NDMC) vice-chairman Satish Upadhyay over the ongoing drive to seal shops for non-payment of property tax, officials aware of the matter said.

NDMC sealed seven units in Connaught Place on Wednesday over non-payment of property taxes. The civic body said it will continue its drive in the coming days as there were 1,500 long-term defaulters in the New Delhi area with arrears amounting to ₹3,500 crore. (Sanchit Khanna/HT Photo)

The traders called for the implementation of a uniform assessment method for calculating tax. The Market Traders Association also submitted a memorandum highlighting the concerns of the association to Upadhyay. The NDMC vice-chairman agreed to pursue the matter with chairman Amit Yadav, they added.

Upadhayay said, “We advocate for the adoption of a unified tax system, aligning with broader national initiatives such as the uniform implementation of goods and services tax, across the country. There is a need for a streamlined tax framework. MCD, in its area, has already adopted the unit area method , which is not only convenient but also a right choice for all. We will address these pressing issues in collaboration with key stakeholders, including senior council officials, lieutenant governor and ministry of home affairs.”

The Market Traders Association (New Delhi Traders Association or NDTA) has said that they are not against tax recovery, but the way the drive is being carried out is against the provisions of the NDMC Act. In its memorandum, the association highlighted that dues amounting to crores of rupees have been pending over several years, leading to undue hardships for both landlords and tenants. The situation also resulted in closure of shops as huge liabilities make it impossible for tenants to run shops, it added.

NDMC sealed seven units in Connaught Place on Wednesday over non-payment of property taxes. The civic body said it will continue its drive in the coming days as there were 1,500 long-term defaulters in the New Delhi area with arrears amounting to ₹3,500 crore.

Atul Bhargava, a member of NDTA, said that the tax department teams may come back on Friday. “We are saying that there should be one tax system in the form of unit area method across the city. Under the old system, the taxable value calculation depends on the tax inspector and the rentals on different properties vary. Some units have been issued tax notices of ₹20 crore.”

The unit area method of calculating property tax was introduced in MCD areas in April 2004. The civic body’s formula used for calculation of tax depends on unit area value (per sq metre) depending on the category of area, age of the property, nature of the structure and occupancy.

An NDMC official who did not want to be named said the civic body tried to implement the unit area method in 2009, but the traders moved court against it saying that an amendment in the NDMC Act would be needed to implement the change in tax regime.

“Earlier, the tax was calculated based on the rent value, but when NDMC introduced the unite area method in 2009, the trade associations opposed it in courts. It was argued that the NDMC Act needs to be amended by Parliament for implementing any change in the tax system. The courts allowed the petitioners to voluntarily adopt the unit area method or continue the existing assessment formula. The civic body is working on getting the NDMC Act for bringing a uniform tax policy,” the official added.