BMC property tax collection hits hurdle

Over two quarters down the fiscal, property tax collection in Mumbai has moved nowhere. Amid confusion over rules implementation and COVID-19 pandemic, the property tax and assessment department has not generated any bills for property tax even as six months of the financial year has passed. The civic body currently has a backlog of property tax collection to be collected amounting to Rs 5,500 crore, officials said.

Its been eight months since this fiscal began, the Brihanmumbai Municipal Corporation (BMC) has not issued property tax bills yet.

This is largely on account of the confusion created by the implementation of tax waiver for residential units of 500 sq ft and less, leading to the non-issue of property tax bills. The latter would make other dues linked to the property tax payable.

Mumbai has over 4.2 lakh property owners. As per the property tax and assessment department, 1.37 lakh people, owning houses of area up to 500 square feet, are eligible for a complete property tax waiver.

BMC is yet to get a clarification from the state government over the complete waiver of property tax for houses up to 500 square feet. Last year, the state government had issued a notification on providing the waiver. However, the components of the taxes that could be waived stay undecided. The confusion, BMC officials claim is because municipal administration was not clear whether the state’s intent is a complete waiver or merely the base amount waiver in the form of general tax. The civic body can generate a bill only once this is clear.

Not only this but there was no clarity about hike to be implemented on the property tax this year.

"As per the rules, the civic body is supposed to increase the property tax rates every five years. Accordingly, the revision was due in March 2020. The bills for the remaining residential units were not generated owing to this confusion. However, the civic standing committee in September 2020, differed the hike for this fiscal. We are working on generating bills and it will be ready to be issued by December 10," said an official of BMC property tax and assessment department.

He added, "There is still too much confusion about the implementation. We are consulting over the state government's GR with our legal team, before issuing the bills."

For the corporation, property tax becomes the biggest source of income (24 percent) for the civic body after the octroi was abolished. BMC has failed to achieve its target since the financial year 2016 to 2017. It had set a target of Rs 6,788.58 crore from property tax collection for 2020 to 2021. However, with the prevailing situation, it seems that the civic body might fail to meet its target yet again.

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Free Press Journal