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Metro vs Municipal: No U-turn on UPMRC property tax notices, says LMC
Notably, it’s not just UPMRC that’s in LMC’s crosshairs. The Indian Railways has also received a property tax recovery notice amounting to ₹73 crore.
LUCKNOW The Lucknow Municipal Corporation (LMC) has specified that it will not withdraw the property tax notices issued to the Uttar Pradesh Metro Rail Corporation (UPMRC). Ambi Bisht, the chief tax fixation officer of LMC, made this announcement on Thursday, emphasising that the LMC is fully entitled to collect taxes from UPMRC for the services it provides.
Bisht pointed out that commercial establishments, such as pizza places and eateries, operate at several metro stations, profiting from their presence. However, these establishments have been reluctant to pay taxes, despite the fact that LMC is responsible for managing the waste generated by metro stations and their commercial enterprises.
With 21 metro stations under their purview, LMC has served a notice to recover ₹7.57 crore in taxes from UPMRC, an amount that LMC believes is a reasonable contribution given the services provided. Additionally, LMC is preparing to issue another notice to UPMRC, this time regarding the taxation of advertisements displayed on poles without LMC’s consent. Bisht asserted that the revenue from advertising within the city should rightfully belong to LMC.
Notably, it’s not just UPMRC that’s in LMC’s crosshairs. The Indian Railways has also received a property tax recovery notice amounting to ₹73 crore. Both UPMRC and the railways have been given a one-month ultimatum to settle their dues; otherwise, LMC will take more stringent actions against them.
Municipal commissioner Inderjeet Singh echoed LMC’s stance, emphasizing that the metro must pay property tax since there are no directives from the state government for tax exemptions in the case of the metro.
In response, an official from UPMRC argued that they are entitled to exemptions from state and local taxes, citing a Memorandum of Understanding (MoU) dated March 16, 2016, signed between the state, the Centre, and UPMRC. The MoU explicitly commits to exempting UPMRC from state and local taxes, duties, and levies, if any.
The UPMRC official mentioned that they have presented their case to higher state government authorities, firmly believing that, with government support in accordance with the MoU’s provisions, they can ensure the profitability and long-term sustainability of the metro rail network in Uttar Pradesh, which remains an essential lifeline for the state’s urban population.
Furthermore, the outstanding loan of 450 million Euros from the European Investment Bank (EIB) underscores the critical importance of adhering to the MoU provisions for the financial well-being of UPMRC.
