The city Corporation is making yet another attempt to collect the outstanding building tax amount from various State government institutions located in the city. Countless attempts have been made in the past, with bills and demand notices issued, but there has been no response from many of these institutions.
Topping the list of defaulters is the Kerala Water Authority (KWA), which has not paid building tax from as far back as 1988. The KWA owes the city Corporation an amount of ₹4.24 crore in building tax.
The Public Works Department occupies a building for which taxes have not been paid since 2005, taking the total outstanding amount to ₹47.43 lakh.
The Ground Water Department has not paid building taxes since 2003, with an outstanding amount of ₹72.48 lakh.
“Most of the officials in these government institutions, who are supposed to look into these matters, assume that these buildings are exempted from paying taxes as they belong to the government. But such exemption is given only to a small group of institutions, including some schools and orphanages. This remains as arrears for several years in our accounts, leading the audit department to pull up the Corporation every year for laxity in tax collection. The Corporation also has its limitations in proceeding against such institutions, in case of non-payment,” says a Corporation official.
Exemptions
But, according to Section 235 of the Kerala Municipality Act, which deals with the various kinds of exemptions, the Corporation has the right to collect service tax from these institutions, even if they are exempted. According to subsection 5, “Notwithstanding anything contained in this Act or any other law for the time being in force, in the case of properties exempted from property tax under [sub section (1)], the Municipality shall be entitled to claim the cost of services covered by the service taxes.” The services rendered include street lights, drainage and tarred roads.
The Corporation has now decided to write to the heads of these institutions to pay the arrears amount at the earliest.
