Flawed survey of properties hits NMC coffers hard

NMC Nagpur
Nagpur: The coffers of Nagpur Municipal Corporation (NMC), already facing financial crisis, were further dented — courtesy flawed survey of properties conducted by a private firm – CyberTech Systems and Software Ltd. The haphazard survey not only hit NMC’s revenue hard but also ‘terrorised’ property holders with inflated tax demands, according to media reports.

Buckling under heavy pressure of the Opposition parties and property owners, ruling Bharatiya Janata Party (BJP) in NMC has decided to impose a heavy fine on CyberTech for the faulty survey of properties. The civic body will also levy fine to the tune of Rs 10,000 for delay in completion of the survey project. The civic body rejected the demand of the Opposition benches for scrapping of the tender of CyberTech.

The ‘optimistic’ NMC Administration is hoping against hope of increased collection of the property tax as compared to last year. But no official in the civic body is ready to talk of the targets. Till December 31, a revenue of Rs 114.88 crore towards Property Tax was collected by the civic body. In the same period last year, NMC had made a recovery of Rs 113.10 crore tax. As compared to last year, the recovery is more by Rs 1.78 crore. But still the figures are far away from the target.

Notably, 1.60 lakh property holders were issued tax demands till to date. The NMC administration had shown urgency in distribution of tax demands but the recovery hit the hurdles following glaring shortcomings in the survey of the properties. Despite the “Abhay Yojana” (amnesty scheme) floated for the defaulters of the property tax did not yield the desired results. Finally, the NMC administration decided to auction properties of defaulters. This resulted in recovery of the tax but in the ‘peanut’ proportions, according to media reports.

On the hand, enraged by the exorbitant tax demands, the property holders first registered objections and later stopped payment of the tax. This act of the property owners hit the revenue of cash-starved NMC hard, further.

Rs 427 crore deficit:
The Local Body Tax (LBT) and Octroi Duty, the main sources of revenuefor NMC, have already been scrapped. Subsequently, the civic body had demanded State Government a grant of Rs 1065 crore as GST grant. Rs 88.75 crore GST grant was expected every month but the State Government gives Rs 51.36 crore only. Considering the budgetary provisions of the NMC, it is likely to face a deficit of Rs 427 crore. Now the NMC administration is in dilemma as to how this huge deficit could be covered.

Coming to the flawed survey of properties, the Municipal Commissioner Ashwin Mudgal assured 50 per cent deduction from the payment due to the company. He also assured that the civic body would increase the amount of fine from Rs 500 to Rs 10,000 per day for delay in completion of the survey. So far, NMC has paid Rs 97 lakh to the company as against the total bill of Rs 5.50 crore under B section of the agreement. The bill of Rs 4.80 crore is still pending with NMC. The civic body has paid 80 per cent of the total amount of Rs 6.75 crore to CyberTech for providing software and other equipment.

On the other hand, Leader of Opposition Tanaji Vanve demanded scrapping of contract with Cyber Tech due to faulty survey. He alleged that the inflated property tax demands showed that the company team did not visit any household. “They have collected the details without any proper survey,” he alleged.

NMC offers major relief to property owners:
According to media reports, the Nagpur Municipal Corporation (NMC) has announced plethora of relief to the property tax payers reeling under huge demand of tax. The civic body has given a major relief to the tax payers by removing the clause of rented property from the commercial and residential properties and same tax will be levied on self-occupied or rented property. The tax payers can get 4 percent concession on total demand for payment of tax till March 31, 2018 and civic body will not levy 2 per cent penalty on payment after December 31, 2017. Taking serious note of public uproar due to exorbitant hike in the property tax, the civic body has also put a cap on property tax and it will not be more than two times the old tax demand.

Presently, the civic body is levying three times tax on rented properties, which is a major bone of contention since property owners are unwilling to shell out more tax for similar use of property by other person. The rental income also attracts income tax and it is unfair for the NMC to recover three times property tax without providing any extra service, the property owners have contended.

Media reports further said that the Municipal Commissioner Ashwin Mudgal said, the civic body has given another major relief by deducting 15 percent area of wash room, toilet, varandaha, staircase, balcony from the built-up area. Earlier, the civic body used to exempt 10 per cent area from the built up area of the property but in view of demand from the taxpayers, theNMC has now increased it up to 15 percent, the media reports said.