Despite the strong objection raised by opposition leaders, the BrihanMumbai Municipal Corporation's (BMC) standing committee, on Wednesday, approved the proposal to waive off the three months’ property tax of hotels take over amidst the COVID-19 pandemic. The civic body will waive off Rs 22 crore of property tax of 167 hotels across Mumbai as a gesture of gratitude.
However, the Leader of Opposition (LoP) in BMC and Congress corporator Ravi Raja, on Tuesday, wrote to the civic chief, officially lodging his objection against the waiver and calling it unfair and unethical. The LoP and other corporators pointed out that majority of these hotels have not paid the property tax arrears to the civic body, which amounts to over Rs 144 crore.
These hotels were taken over by the civic body at the height of the pandemic to house high-risk contacts, health workers and civic staff. Since a tax waiver of such level requires the state government’s clearance, which is a time-consuming procedure, BMC’s Health Department will pay the tax (Rs 22 crore) on behalf of these 167 hotels for now.
“This is a gesture of gratitude towards these hotels. They helped us when we needed space to house our staff and doctors and people arriving from other countries,” BMC Commissioner Iqbal Chahal had told the Free Press Journal.
A senior BMC official explained, “The message we want to send out is that the municipal corporation will not forget the help it got in a crisis. The payment, for now, will be made from the Health Department’s account to the assessor’s and collector’s department directly."
The tax waiver is for the three months (April, May and June) and will act as a big relief to the hotels that faced huge losses during the lockdown. BMC took over close to 5,000 hotel rooms. People arriving from other countries needed to be quarantined for the mandatory 14 days.
It also needed rooms to house other high-risk contacts and its own staff, including doctors and nurses, who would have posed a risk to their families if they went home from work every day after work.
“This is a wrong decision. BMC had paid for those rooms that were acquired. It was the need of the hour. Majority of these hotels have evaded paying property tax for the year, and do not deserve the waiver," said Rais Shaikh, Samajwadi Party corporator from Mandapura and Bhiwandi MLA.
However, civic officials justified the move by saying, "Though we paid for these rooms that we took over, it was nowhere near their earnings per room in pre-COVID-19 times."
"The daily tariff paid for a five-star hotel roomS was Rs 3,500 plus taxes, for 4-star rooms Rs 2,500 plus taxes, for three 3-star rooms Rs 2000 plus taxes and non-star rooms Rs 1,500 plus taxes. This was inclusive of three meals a day. Only people arriving from other countries paid for their stay. For everybody else, the entire cost was borne by the BMC. I and other corporators in the opposition objected, but the proposal was approved by the standing committee," said Ravi Raja. He added, "Majority of these hotels have not paid the property tax arrears to the tune of Rs 144 crore. An additional waiver will be unfair to Mumbaikars. The administration is yet to officially clear the proposal of property tax waiver on flats / residential units admeasuring less than 500 square feet."