Taxes push up Kolkata office costs

High taxes had pushed up cost of property in the Kolkata Municipal Corporation (KMC), hampering growth of information technology (IT) industry.

The Confederation of Real Estate Developers Association of India (CREDAI) said commercial property rentals were 50 per cent higher in KMC area compared to Bangalore or Pune. Kolkata was seeking to attract investment in IT and IT enabled services from them.

Santosh Rungta, vice president of CREDAI (east), said government and municipal taxes have made property costlier in Kolkata, adding, "On a like to like basis, rent within KMC area would be Rs 40-45 per square foot against Rs 25-32 in Bangalore."

CREDAI has called for review of laws and processes to reduce costs and attract investors. It is going to organise a regional conference, 'Vision India 2020 Housing For All', here on January 21 on these issues.

CREDAI secretary Pradip Chopra said almost 56 per cent of that rent was actually taxes and charges imposed by the government, and this prevented the city from becoming a competitive business destination. Sanction fee was another problem in the KMC area.

"The Rs 150 per square foot sanction fee for commercial property must be the highest in the world. Bangalore charges only Rs 8. Also time taken to sanction plan was high, as it takes only 60 days in Bangalore while in Pune, some cases are sanctioned within 24 hours," Chopra said.

Old acts like Urban Land Ceiling Act (ULCA), Wakf Act and Thika Tenancy Act had stalled real estate development. Sushil Mohta, a CREDAI member, these prevented corporate investments in big projects.

"Land was not available for big format projects," Jugal Khetawat, a veteran developer pointed out.