28 February,2020 07:20 AM IST | Mumbai | Prajakta Kasale
This picture has been used for representational purpose
In the last month of the financial year, the BMC has begun taking stringent action to recover property taxes worth crores. The BMC's property tax income has remained stagnant at Rs 5,000 crore over the last five years while the tax involved in disputed cases and writ petitions has doubled in this period. Disputed and pending tax stood at Rs 8,363 crore in March 2015 and has risen to Rs 16,167 crore as of February.
At the end of the global recession of 2008 and boom in the real estate sector, the income through property tax rose from Rs 3,398 crore in 2011-12 to Rs 5,702 crore in 2015-16. After this, it has only seen a decline though with the BMC collecting around Rs 3,200 crore for 2019-20 so far. Despite being its largest source of income, the civic body has not been able to find a solution to recover disputed property tax.
In the current financial error, the tax amount involved in subjudice matters is '2,702 crore while another R10,284 crore is stuck in disputed matters pending on various levels at the BMC. Reasons for the accumulation of such a high amount are many, said advocate and property expert Vinod Sampat.
"The accounting system of the civic body is faulty. They don't merge the previous year's amount into the next year and societies willing to pay past dues can't pay it in the absence of proper records," he said.
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Another reason is the introduction of capital value tax in 2012. The tax levied on properties in south Mumbai increased by many folds and many refused to pay it. After the HC strike down of BMC's formula for property tax 2010, the civic body introduced 1.2 multiply factor to adjust the difference between built-up area rate and the corporate rate which was once again rejected by the HC, leading to many court cases.
"The BMC doesn't have a record of these things. It has given a contract to another agency. This leads to confusion among tax-payers," said Asif Zackeria, corporator from Bandra.
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