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Mumbai civic body to crack down on property tax defaulters as dues mount to Rs9,947 crore

Some of the prominent defaulters are Mumbai’s real estate developers, corporate houses, major housing societies and even sports/recreation clubs

mumbai Updated: Feb 16, 2018 09:46 IST
Sagar Pillai
Sagar Pillai
Hindustan Times
Mumbai civic body,BMC,property tax defaulters
Civic officials have identified major defaulters and have prepared a list of 100 top defaulters, who have not disputed the amount, as recovery from them would be easier. (HT FILE PHOTO)

The Brihanmumbai Municipal Corporation (BMC), which is facing a shortfall in its revenue, is yet to recover dues of Rs9,947 crore in property tax, pending for years. The defaulters include commercial and residential property owners. The civic body has now decided to crack the whip on these defaulters and a plan is being worked out to expedite the collection of dues, said a civic official.

Some of the prominent defaulters are real estate developers, corporate houses, major housing societies and even sports/recreation clubs. According to information, the pending property tax includes Rs4,854 crore, which is not disputed by defaulters; and Rs5,093 crore, which has been challenged by the property owners in courts.

Civic officials have identified major defaulters and have prepared a list of 100 top defaulters, who have not disputed the amount, as recovery from them would be easier. Civic officials handling the issue said these defaulters will face strict action, including sealing of their properties if they continue to default on payment. However, no action for recovery can be initiated for the recovery of the disputed amount (Rs5,093 crore) since those matters are in courts.

“Some of these major defaulters have not paid their dues for more than a decade. Some of the dues are outstanding since 1993 and are being disputed. Defaulters have also moved courts, challenging the tax amount,” said an official.

Devidas Kshirsagar, assistant municipal commissioner (Assessment and Collection Department) of the BMC, said, “The overall amount of unpaid taxes is huge. More than 50% of the outstanding amount is disputed by the defaulters. We are currently focusing on the recoverable taxes that are undisputed and are following up on the issue of disputed amounts too. Action is being initiated against the defaulters and the targeted amount for this fiscal year will be successfully achieved.”

Property tax is the second-highest revenue source of the civic body, after the development charges that are recovered from the real estate sector. Earlier, octroi duty was the highest source of revenue till it was abolished with the introduction of the Goods and Services Tax (GST).

This year, the civic body was anticipating Rs4,997 crore collection in development charges, but now it is expected to fall short by Rs1,050 crore. Even property tax collection has witnessed a dip. The revenue from property taxes collected in the financial year 2017-18 is Rs4, 958 crore against its target of Rs5,205 crore. Civic officials said the targets will be achieved by the end of this fiscal.

Citizen activists, meanwhile, criticised the civic officials for not recovering the property tax.

Godfrey Pimenta, founder of Watchdog Foundation, said, “The BMC has given unwanted leeway to the defaulters because of which the amount has increased. There is no action initiated against top defaulters and they are given more time. There is no limit for keeping the dues pending since some dues are decade-old. There needs to be proper mechanism for collection of taxes.”

First Published: Feb 16, 2018 09:45 IST