The Hindu : New Delhi News : Councillors want tax rebate date to be extended

Online edition of India's National Newspaper
Monday, Jul 03, 2006

New Delhi

New Delhi

Councillors want tax rebate date to be extended

Sandeep Joshi

The executive wing of MCD is against the move as it would demoralise honest property taxpayers

NEW DELHI: Serious differences are emerging between the executive and deliberative wings of the Municipal Corporation of Delhi over the sensitive issue of property tax, as the Councillors now want that the deadline to avail of the 15 per cent rebate on tax that expired on June 30 be extended by at least two months.

After so much of hard work by the officials and employees of the civic body's Tax Assessment and Collection Department, the executive wing is now in no mood to extend the deadline as they fear that it would not only demoralise honest taxpayers but also send a wrong signal to the masses.

Interestingly, the Unit Area Method regime for property tax introduced two years ago recommended against any extension to deadline to avail of rebate. Despite this, the MCD extended the date last year. However, with elections just a few months away, Councillors do not want to take the risk of not giving more time to taxpayers. They are also opposing the controversial penal clause where one per cent additional tax would be charged on quarterly basis after June 30. It is learnt that Councillors might bring a proposal in the next Standing Committee meeting to extend the deadline.

Alarmed by the last year's poor property tax collections, the executive and deliberative wings had pledged to boost the current year's collections and ask taxpayers to pay on time. Subsequently, Councillors and officials swung into action which resulted in good collections in the first quarter of the current fiscal. It may be recalled that in 2004-05, MCD collected Rs. 817.93 crores as property tax, which went down to Rs. 787 crores in 2005-06 against the target of Rs. 1576.16 crores, setting alarm bells ringing in the civic body.

"However, against Rs. 108 crores collected in the first three months of the last fiscal, this year the revenue generated is Rs. 250 crores during the same period, registering a whopping 100 per cent jump. This year we are committed to increase both the number of taxpayers and the revenue collected. The beginning has been good, but now the new demand of the Councillors might undo all our hard work," rued a senior MCD official.

It is learnt that at last three to four rounds of talks have already been held between senior Councillors and top MCD officials on the issue where the latter opposed proposal to extend the deadline. The Councillors were told that after registering an increase in collections, officials now want to concentrate on pending cases and resolve matters related to arrears so that more revenue could be collected this year, but the deliberative wing insisted on extending the deadline.

"We have told out elected representatives that this will send a wrong signal to the people at large. People will stop believing us and not take any of our future programmes seriously. After concerted campaign and public awareness drive this year we managed to convince people to pay their taxes on time. But if we extend the deadline now, the civic body will be a big loser," the official added.

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