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Friday, Sep 20, 2019

After 13 years, Chandigarh MC hikes tax on commercial properties by 10%

Decision to affect only commercial buildings, land; no change in house tax

punjab Updated: Aug 31, 2017 13:53 IST
Hillary Victor 
Hillary Victor 
Hindustan Times, Chandigarh
The property tax has been revised for the first time since its introduction in 2004.
The property tax has been revised for the first time since its introduction in 2004. (HT File )

For the first time since introducing property tax in the city in 2004, the Chandigarh municipal corporation (MC) has increased it by 10%.

All about the tax
  • Intro The MC had introduced property tax on commercial buildings and land on November 22, 2004
  • 4 Zones in MC limits
  • 23,000 Commercial units
  • Rs 3 to Rs 20 per sq ft Current tax (depending upon zone)

The decision, which was taken during the monthly House meeting on Wednesday, applies only to commercial establishments. Even as Congress councillors opposed it, the Bharatiya Janata Party (BJP) — which is in majority — passed the agenda. The civic body started levying property tax on commercial land and buildings with effect from November 22, 2004. There are about 23,000 commercial units falling within the MC limits. The tax ranges between Rs 3 and Rs 20 per square feet, depending upon the zone in which the property falls. There are four zones in the city. 

Property tax on residential land and buildings (known as house tax) was imposed in 2013-14 and then 2015-16 onwards. It is not charged on properties having covered area less than 500 square feet. There will be no hike in this tax.

 Finances in bad shape: MC chief

During the House meeting, municipal commissioner B Purushartha admitted that the financial condition of the civic body was in a bad shape. “Even though we have approved so many agenda items in the past, we do not have money to complete the projects,” he said. 

Purushartha told the House that although the MC has an approved budget of Rs 1,000 crore, the UT administration allocated only Rs 265 crore to it. The civic body generates only Rs 125 crore from its own sources of revenue, while it has to pay Rs 300 crore as salaries to its employees, he said.

“We are left with only Rs 90 crore,” said the MC chief, while justifying the need to increase the property tax. “If fresh avenues of revenue generation are not created, we will not be able to carry out development works.”

Recarpeting of roads, repair and renovation of community centres, improvement in water supply and sanitation, and maintenance of green belts and parks are some works where the fund crunch is proving to be a major hurdle. 

At present, besides property tax, the MC’s main sources of income are paid-parking lots, rent from cable operators, taxi stands, community centres, night food street, subway shops, eating joints and liquor vends, auctioning of seized articles, festival charges and rickshaw licence fee.

Missed opportunities 

The Congress slammed the BJP-led civic body for its failure to generate revenue from MC properties worth over Rs 200 crore, which are lying vacant, and burdening the common man.

Sample this:
  • For a shop-cum-office (SCO) in Sector 22, the property tax to be paid annually goes up from Rs 30,582 to Rs 33,640
  • For an SCO in Sector 17-E, it will be Rs 39,817 instead of Rs 36,197 per year

“Madam people will remember you as tax-wali mayor,” Congress councillor Devinder Singh Babla told mayor Asha Kumari Jaswal. Babla said Chandigarh is not a city of landlords and the MC has failed to collect over Rs 12 crore from water bill defaulters. “Businessmen are already suffering losses due to imposition of the goods and services tax (GST),” he said. 

Non-allotment of booths in the Sector 17-22 subway, too, has caused a loss of around Rs 8 crore to the civic body in the past 10 years. The then MC chief, Vivek Pratap Singh, had constituted a committee in August 2014 to frame a policy for booth allotment, but things didn’t move ahead.  Now, the MC is planning to auction them. 

First Published: Aug 31, 2017 13:32 IST