New property tax system to be tabled today

Mumbai: After rejecting the new property tax system twice last year, the proposal for implementing the capitalvalue based property tax system is once again to be tabled at the standing committee on Wednesday. With no consensus among political parties, the new system was put in cold storage as no party wanted to take the risk ahead of the civic polls. 

    In the budget speech a few days ago, municipal commissioner Subodh Kumar had mentioned that the civic administration would "adopt property taxes based on the capital value system" but was awaiting the standing committee's nod. Data for around 50,000 properties has been entered into the capital value system. "The administration can issue special notices and also finalize property tax bills on capital value as soon as rules for fixation of capital value and rates of property taxes are approved by the standing committee and the corporation. The rules and rates have been proposed to the standing committee," said Kumar. 

    The BMC plans to shift the property tax calculation structure from the rateable value system, based on rent, to a capital value system—based on the property's market price. Under the present structure, property tax is computed on the basis of rent paid by tenants, but now it will be computed on the market rate. 

    The civic body has missed the deadline for implementation of the capital value-based property tax regime. The state cabinet has granted a year's extension for implementation of the system. The legislature had approved the switchover in March 2010. 

    The civic body was expected to introduce the system from April 1, 2010. But, with the BMC unable to frame business rules, decide tax rates and collect data of properties to be assessed on time, it was granted the extension. It was again granted time to complete procedures by the end of 2011-12 and implement the new regime from April 1, 2012. 

Govt scraps octroi in Ulhasnagar 

    The Maharashtra government has decided to abolish octroi in Ulhasnagar from March 31; it will be replaced by a local body tax (LBT) from April 1. Traders are happy with the abolition but instead of the LBT system, prefer the Gujarat pattern. The government plans to do away with octroi in all D class municipal bodies in a phased manner. Traders here have often protested against octroi, alleging harassment by Konark Infrastructure, which has been collecting octroi for four years. Prakash Bajaj, president, Ulhasnagar Mobile Association, said, "For many years, the contract has been going to a contractor who has been harassing our traders." Naresh Durgani, president, Federation of Sindhunagar Vyapari Association, said, "We prefer the Gujarat pattern, where the local body charges one percent of the goods." –Pradeep Gupta