Assessment to be as per new building tax slabs

The upcoming implementation of new building tax slabs in the City Corporation area is likely to enhance the local body’s revenue.

Until now, buildings were classified as residential and commercial. All commercial buildings, including government offices and private companies, were being taxed at the same rate.

In the government order (GO) of March 27, 2013, the commercial category was broken down further into shops, offices, auditoriums, conference halls, restaurants, workshops, lodges, schools, trade union offices, service stations etc. to enable better tax collection. This GO is an amended version of another one, issued by the previous Left Democratic Front government in January 2011.

“The work on the classification of the buildings and detailed mapping according to the area is going on. We are checking for illegal constructions, which includes some government buildings. The tax collection is expected to increase by 20 per cent,” P. Shyamkumar, chairman of the Tax Appeals Standing Committee of the City Corporation, said.

The tax on buildings used as trade union offices might come down as per the new assessment. Many of the government buildings had remained out of the radar of building taxes for various reasons.

“In the case of Central government buildings, the directive was to exempt them from building taxes and collect a service tax instead. But, due to the lack of proper guidelines from the government, this did not take off. So, no tax is collected from most of the Central government buildings,” Revenue Officer A. Unnikrishnan Nair said.

This gets more complicated in the case of Central government institutions that became corporate entities. Bharat Sanchar Nigam Ltd. (BSNL) does not pay any building tax but it continued to claim exemption as its buildings were still under the ownership of the Centre. The issue was in court. This problem was common to all local bodies, sources said.

In a tax reassessment exercise by the local body last year, many government-owned buildings, including the Assembly complex at PMG, ended up getting a huge bill. The Assembly’s case was referred to the State government by the Corporation. The Pattoor waste treatment plant also got a bill of Rs.10,000 and a reduction of 30 per cent was later given by the appeals committee.