Opposition objects to BMC's property tax waiver for Mumbai hotels

The Brihanmumbai Municipal corporation’s proposal to waive off three months’ property tax of hotels taken over during Covid crisis now faces stiff objection from the leader of opposition in the civic body. The civic body in September proposed to waive off Rs 22 crore of property tax of 167 hotels across the city, as a gesture of gratitude.

Leader of Opposition (LoP) in BMC and Congress corporator Ravi Raja has written to the civic chief officially lodging his objection against the civic body's proposal. The LoP has pointed out that the majority of these hotels have not paid the property tax arrears to the civic body which amounts to over Rs 144 crore.

These are the hotels taken over by the civic body at the height of the Covid-19 crisis 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, for now, BMC’s Health Department will pay the tax (Rs 22 crore) on the behalf of these 167 hotels.

Elaborating on the proposal civic chief said: “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,” said BMC Commissioner Iqbal Chahal.

A senior BMC official said: “The message we want to send out is that the municipal corporation will not forget the help it got in a crisis. The bills are yet to be raised to the taxpayers. When the bills are raised, they will be book adjusted. Payment will be made from the health department account to the assessor 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 as they faced huge losses during the induced lockdown. BMC took over close to 5,000 hotel rooms as 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.

"Though we have paid for these rooms that we took over, it was nowhere near their earnings per room in pre-Covid times," said the civic official.

"The daily tariff paid for a five-star hotel room was Rs 3,500 plus taxes, for 4-star rooms Rs 2,500 plus taxes, for three 3-star Rs 2000 plus taxes and for a non-star room 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. Then why do we need to waive off property tax," 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 Mumbaikar's. The administration is yet to officially clear the proposal of property tax waiver on flats / residential units admeasuring less than 500 sq feet. In my letter to the Municipal Commissioner, I have clearly mentioned that all those hotels who are yet to clear previous property tax arrears should not be given any further waiver."

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