Property tax arrears running into several crores of rupees remain unrecovered by the Kochi Corporation even as a financial crisis has crippled the activities of the civic body.

The realisation of the arrears has been marred by the absence of updated database on arrears and effective mechanism to recover them, it has been found.

The report of the Comptroller and Auditor General (CAG) of India for the local self-government institutions for the year ending 2011 revealed that Rs. 25.61 crore was due to the civic body from various agencies and individuals.

Even while pointing out the loss sustained by the civic body, the CAG observed that the demand register/arrear demand register maintained by the Corporation was not updated and complete.

The details like year-wise arrears or the arrears of the individual assesses were not readily available. Hence the Corporation could not make any effective steps for realising arrears in individual cases, it said.

The agency has reported that there were 911 cases and a combined due of Rs. 97.87 lakh in the 27 and 39 divisions of the Corporation alone.

Though the Corporation had levied penalty in cases of delayed remittance of tax, it had not initiated revenue recovery or prosecution procedures in any of the cases, the CAG criticised.

The arrears, leaving out the penalty component, due from the Government Guest House building were Rs. 1.67 crore. Though the tax for the building was to be collected from October 1, 2005, it was demanded only in April 2009.

Even though the assessee did not remit the tax, the Corporation did not pursue the case or initiate steps for recovering the amount, it pointed out.

The Corporation secretary later informed the agency that the civic body had issued a demand notice to the Regional Director of the Department of Tourism.

The Corporation has also failed to collect the service tax of Rs. 57.22 lakh from the 24 offices of the government of India in the city and that of the Indian Navy.

The arrears of the service tax amounted to Rs. 3.94 crore. Though the buildings are exempted from property tax, the civic body can collect from these buildings service tax based on the service offered to them, it said.

The secretary of the Kochi Corporation communicated to the agency that the issue would be brought to the notice of the Corporation council and steps would be initiated for realising the arrears.

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