Gurugram municipal body asks PG owners to pay tax per bed, notices sent - Hindustan Times
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Gurugram municipal body asks PG owners to pay tax per bed, notices sent

Hindustan Times, Gurugram | By, Gurugram
Nov 14, 2018 02:42 PM IST

According to officials, the MCG has lost ₹20 crore, since 2008, as it did not tax PG owners under the ‘lodging house’ category.

For the first time since its formation in 2008, the Municipal Corporation of Gurugram (MCG) issued notices to city’s paying guest (PG) accommodation owners asking them to pay 1,000 per year per bed in their establishment as tax under the Haryana Municipal Corporation Act. Officials said that PG owners who fail to submit the tax for this year may be penalised and their property sealed.

PG owners have complained that despite having filed for licences for their establishments, their files are still pending with the Municipal Corporation of Gurugram.(HT Photo)
PG owners have complained that despite having filed for licences for their establishments, their files are still pending with the Municipal Corporation of Gurugram.(HT Photo)

On April 27, the Hindustan Times had reported that MCG officials, after reporting highest-ever property tax collected in the last fiscal (in excess of 400 crore) realised that in the absence of a framed policy on commercial properties, around 5,000 guest houses and PG accommodations were being taxed at residential rates. Had these establishments been categorized correctly as commercial properties, which have a higher tax slab, the MCG would have earned around 50 crore in the 2017-18 fiscal alone. Officials had then said that one of the major hindrances in treating PG accommodations and guest houses as commercial properties was the absence of a policy.

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Though the MCG still does not have a policy defining such properties, the MCG commissioner said that for now they are being taxed under the provisions of the ‘lodging house’ category of the Act.

“I found the category while going through the Municipal Corporation Act. Officers told me that PG owners were not being taxed under this category. So, I directed them to determine the exact number of PGs under MCG’s jurisdiction and send notices to the concerned owners,” MCG chief Yashpal Yadav said.

According to officials, the MCG has lost 20 crore, since 2008, as it did not tax PG owners under the ‘lodging house’ category.

Following Yadav’s direction, 1,240 PGs were identified across the city—38 in Zone 1, 395 in Zone 2, 770 in Zone 3 and 37 in Zone 4. MCG officials said that nearly 40% of city’s PGs are located in DLF phases 1, 2 and 3.

MCG chief medical officer and the nodal officer for this task, Ashish Singla, said, “We started the process of issuing individual notices to 1,240 PG owners (last Tuesday). We have given them 10 days to pay the requisite sum and have even started receiving payments. As per the (municipal) Act, if the payment is not received within the defined time period we will issue another notice to the concerned PG owner, after which we will take strict action.”

Officials said that if the PG owner fails to pay the sum even after two notices their property could also be sealed.

Singla did not disclose the number of PG owners who have notified or the sum received as tax till November 13.

MCG officials privy to the matter said that although a policy for guest houses and PGs remains to be formulated, the latest directive is expected to boost the civic body’s property tax collection for the 2018-19 fiscal. However, no official order to this effect has been passed yet.

Reacting to the development, Hemant Gupta, a member of the Millennium City Guest House Association, an umbrella body of PGs, guest houses and lodges in the city, said, “There have been a number of statements from the state government and the various civic bodies in Gurugram for a policy to be formulated for PGs, guest houses and lodges for nearly a decade, but nothing has happened. Last year as well, the MCG had sent notices to us for procuring licences for our businesses and most proprietors obliged. However, the file for issuing these licenses is still pending with the MCG. We feel the notices being sent by the MCG for paying tax will also meet a similar fate.”

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  • ABOUT THE AUTHOR
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    Kartik Kumar is a correspondent with the Hindustan Times and has covered beats such as crime, transport, health and consumer courts. Kartik currently covers municipal corporation, Delhi Metro and Rapid Metro.

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