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The Trinamool Congress government in West Bengal is hopeful that in six years, the loss from the property tax break for Kolkata buildings painted blue and white will not be more than 0.1 per cent.
Elections to the Kolkata Municipal Corporation are scheduled for April and with the Calcutta High Court questioning the tax waiver, the issue has become political. Chief Minister Mamata Banerjee has pitched the blue-white combination as a city beautification project.
For 2014-15, the KMC’s tax revenue is estimated to be Rs 770 crore, of which property tax, including surcharge, is projected at Rs 745 crore, or 97 per cent of the total tax collection. However, according to a KMC official, over a six-year period, the loss in revenue is likely to be 0.1 per cent because the tax break can be availed only once in six years.
“Even if all the assesses apply for a tax break in 2015-16, the loss will not be more than 15 per cent. We expect only a few houses will be repainted, given the paltry tax break involved. It should not cost the exchequer much,” said Debabrata Majumdar, KMC mayor-in-council member.
“Between 2010 and 2015, KMC’s tax collection stood at Rs 3,200 crore, against Rs 1,500 crore between 2005 and 2010, mainly on account of a 30 per cent increase in the tax base,” he added.
However, the Opposition is not only questioning the loss of revenue, they argue the waiver is not in accordance with the principle of plurality. “The move violates the principle of plurality enshrined in Article 14 of our Constitution. If I go for blue, I get an exemption; if I don’t, I don’t get it. This will reveal who are toeing the party line,” said Bikash Ranjan Bhattacharya, former mayor of Kolkata from the Communist Party of India (Marxist).
According to KMC rules, the tax rate ranges between 11 per cent and 40 per cent of the annual valuation of the property.
Hearing a plea against KMC, a division Bench of Chief Justice Manjula Chellur and Justice Joymalya Bagchi of the Calcutta High Court earlier in the week asked the civic body to file an affidavit within two weeks on the rationale behind the scheme.
The civic body had at a meeting of its member mayor-in-council in July 2014 decided to waive property tax for a year for residential buildings painted blue and white, a combination seen on most government offices, including Nabanna building, the state secretariat.
Elections to the Kolkata Municipal Corporation are scheduled for April and with the Calcutta High Court questioning the tax waiver, the issue has become political. Chief Minister Mamata Banerjee has pitched the blue-white combination as a city beautification project.
For 2014-15, the KMC’s tax revenue is estimated to be Rs 770 crore, of which property tax, including surcharge, is projected at Rs 745 crore, or 97 per cent of the total tax collection. However, according to a KMC official, over a six-year period, the loss in revenue is likely to be 0.1 per cent because the tax break can be availed only once in six years.
“Even if all the assesses apply for a tax break in 2015-16, the loss will not be more than 15 per cent. We expect only a few houses will be repainted, given the paltry tax break involved. It should not cost the exchequer much,” said Debabrata Majumdar, KMC mayor-in-council member.
“Between 2010 and 2015, KMC’s tax collection stood at Rs 3,200 crore, against Rs 1,500 crore between 2005 and 2010, mainly on account of a 30 per cent increase in the tax base,” he added.
However, the Opposition is not only questioning the loss of revenue, they argue the waiver is not in accordance with the principle of plurality. “The move violates the principle of plurality enshrined in Article 14 of our Constitution. If I go for blue, I get an exemption; if I don’t, I don’t get it. This will reveal who are toeing the party line,” said Bikash Ranjan Bhattacharya, former mayor of Kolkata from the Communist Party of India (Marxist).
According to KMC rules, the tax rate ranges between 11 per cent and 40 per cent of the annual valuation of the property.
Hearing a plea against KMC, a division Bench of Chief Justice Manjula Chellur and Justice Joymalya Bagchi of the Calcutta High Court earlier in the week asked the civic body to file an affidavit within two weeks on the rationale behind the scheme.
The civic body had at a meeting of its member mayor-in-council in July 2014 decided to waive property tax for a year for residential buildings painted blue and white, a combination seen on most government offices, including Nabanna building, the state secretariat.
