Shiv Sena’s proposal of property tax waiver to cost BMC Rs 600 crore

The Shiv Sena’s proposal of waiving tax for certain residential properties, passed recently by the general body, will cost the Brihanmumbai Municipal Corporation nearly Rs 600 crore in revenue. The proposal has been sent to the state government for its approval. Civic officials said the municipal commissioner should be consulted before the state gives the go-ahead to the proposal and the Mumbai Municipal Corporation Act is amended.

“If this resolution is implemented, there are 15 lakh units that fall under the 500-sqft category, which is entitled to complete exemption from property tax. Another 2.86 lakh units, under the category of houses measuring between 500-700 sqft, will be entitled to a 60 per cent concession. This will mean a loss of 12 per cent of the BMC’s revenue of Rs 5,000 crore from property tax. Now that we have lost octroi too, this loss of revenue can have an impact,” said an officials from the assessment and collection department.

The BMC is likely to incur a loss of Rs 340 crore on property tax collected from houses measuring 500 square feet. The 60 percent concession on on houses between 500-700 square feet is expected to set the collection back by another Rs 257 crore. Ward-wise figures indicate that the maximum collection is from the western suburbs. The K-West ward, which includes areas such as Andheri, Juhu, Versova, generates around Rs 65 crore, the highest amount of property tax for houses which fall under these two categories. Other wards include R Central (Borivali West) contributing Rs 51.27 crore, R South (Kandivli) with around Rs 50 crore and P North (Malad) with Rs 43.6 crore. The lowest amount of property tax is from wards including A ward (Fort, Colaba), which yields only around Rs 2.5 crore.

After the resolution was passed by the general body on July 7, Mayor Vishwanath Mahadeshwar wrote to the Chief Minister on July 18, asking for further action to be taken by the state. “Since the resolution has already been sent to the CM, it is now the state’s decision whether to ask for the municipal commissioner’s opinion. However, if the state asks for the administration’s response, we will highlight the aspect of losing out on a sizeable amount of revenue. Unless we come up with other ways of generating the revenue, the BMC may run into a fund shortage at some point,” said the official.

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