KOCHI: The recent Supreme Court verdict upholding the right of State governments to impose building tax on mobile telecommunication towers has brought a huge relief to local bodies facing serious fund crunch, especially in the district.
The verdict will come in handy for certain local bodies and the State government in their legal fight against mobile tower operators who had challenged the imposition of building taxes on them, according to legal experts.
The tower operators contended in their writ petition before the High Court that mobile towers could not be taxed as they were beyond the remit of government tax on land. The apex court, while throwing out a challenge by mobile tower operators against the Gujarat government’s demand for imposition of building tax on mobile towers, observed that the State governments could impose property tax on mobile towers as the levy was not on the use of the plant and machinery but on the land and building. Though in common parlance a mobile tower is certainly not a building, there is no reason why it should not be considered a building for levying tax under Entry 49 List II of the Seventh Schedule of the Constitution, the Supreme Court observed.
The operators argued that there had been no taxation on mobile telecommunications under the head of property either under the Kerala Municipality Act, 1994 or the Kerala Panchayat Raj Act, 1994. Although the government had issued an order in 2009 imposing taxes on towers, it had subsequently been withdrawn. However, in 2011, the government had asked local bodies to collect tax in accordance with the provisions of the Kerala Municipality Act and the Kerala Panchayat Raj Act. It had been specified that the rate of tax should be fixed subject to the minimum or maximum rate based on the plinth area per sq. metre with effect from April1, 2011.
The claims of local bodies for levying tax on telephone towers are based on the definition of the term ‘building’, which includes any structure for whatever purpose and of whatever material. In fact, the government in 2014 had rejected a plea by tower operators to exempt towers from building tax. Incidentally, building tax is reckoned on the basis of the plinth area of the structure and other factors as provided under the respective Acts and Rules.
