Mumbai: Govt to abolish increased service tax on MHADA-cessed buildings, announces Dy CM Fadnavis

Maharashtra Deputy Chief Minister Devendra Fadnavis. File Pic

Maharashtra Deputy Chief Minister Devendra Fadnavis on Wednesday announced that the government will abolish the increased monthly service tax of Rs 665.50 levied on Maharashtra Housing and Area Development Authority's (MHADA) cessed buildings and will instead go back to the earlier tax of Rs 250.

Fadnavis said that that since these buildings are unsafe, their redevelopment plan will be implemented soon.

He was replying to a question raised in the Legislative Assembly by Bharatiya Janata Party (BJP) MLA Ashish Shelar.

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Fadnavis informed the house that the notices to honour their dues have been issued to 483 stall owners from Girgaon, Worli and Lower Parel areas. Expenditure on repair of cessed buildings, property tax, water tax and shared electricity charge, and other expenses amount to Rs 2,000 per stall per month.
Till March 2019, a service tax of Rs 250 per month was being charged on the cessed buildings. Since April 2019, the tax was increased to Rs 500 per month, with a 10 per cent increase every year.

Accordingly, the current service tax chargeable to every stall owner is Rs 665.50 per month. The tax is less as compared to the monthly expenditure per stall. Also, a temporary stay has been given with regard to levying the revised service tax or issuing notices, he added.

Earlier, Shelar urged the state government to waive off the tax or fix a nominal charge. "In Mumbai, property tax was waived off for houses up to 500 square feet and no property tax is charged to houses from the slums. Also, these dwellers are given houses under redevelopment. Then why is this tax levied on cessed buildings of MHADA," Shelar asked.

He said the MHADA had issued notices to 20,000 families from Girgaon, Worli and Lower Parel areas in Mumbai asking them to pay the arrears of house rent, the fine payable or else vacate their houses.