The Hindu : Front Page : Procedural lapses in property tax system

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Wednesday, Jan 02, 2008
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Procedural lapses in property tax system

Afshan Yasmeen

BANGALORE: Did the Bruhat Bangalore Mahanagara Palike (BBMP) follow all norms in formulating the capital-based value system (CVS) of property tax in the city?

A close look into the process reveals that BBMP officials have violated a State Government directive to set up an expert committee and get the existing self-assessment scheme (SAS) of property tax and CVS evaluated before implementing the new system.

Tax under the new system is calculated on the basis of the capital value and the current year guidance value (i.e. of 2007) of the building. It was based on the annual rental value (ARV) of a building under SAS.

In a letter of May 5, 2007, Principal Secretary (Urban Development) had directed the BBMP to set up a committee to evaluate and integrate the two systems. “The new system can be introduced from April 1, 2008, only after further suitably amending the Karnataka Municipal Corporations (KMC), Act based on the recommendations of the expert committee,” the letter stated.

According to the letter, a copy of which is with The Hindu, the committee’s recommendations should have been submitted to the Government before September 2007. Ignoring this directive, the civic body went ahead and introduced the scheme through a circular on October 4. A resolution in this regard was approved by BBMP Administrator Dilip Rau on September 29.

While all new and unassessed properties came under the new system in October, old properties have to switch over to CVS on April 1, 2008.

‘Serious’

Former Mayor P.R. Ramesh said this was a serious procedural lapse by BBMP Commissioner S. Subramanya. “It is unfortunate that the Commissioner and Administrator have arbitrarily taken a decision. We will bring this to the notice of the Governor to get it revoked,” he said.

Denying it was a procedural lapse, BBMP Additional Commissioner (Finance) Sandeep Dash told The Hindu that the KMC Act was amended in 2004 to enable urban local bodies to collect tax through CVS. “It was implemented all over the State except Bangalore. We had to introduce (it) because the old system became illegal after the amendment,” he said.

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