Imposition of 2 per cent cess on property tax challenged

The Mysore City Corporation’s (MCC) move to impose 2 per cent city transport cess on property tax with effect from April 1 has been challenged on the grounds that it violates the Karnataka Municipal Corporations Act of 1976.

In a release, R. Chandra Prakash, president of the Mysore Grahakara Parishat (MGP), pointed out that Section 103 (Annexure A) of the Act defines all the taxes that can be levied by the Corporation and the MCC cannot levy any tax other than those enumerated in the law.

The MGP also argued that levy of other cess including health cess, anti-beggary cess, library cess, vacant site cleaning cess, and UGD cess violated the Act.

The parishat pointed out that the State government already levies a heavy tax on petroleum products like petrol and diesel and collects funds through motor vehicles tax and registration of vehicles.

“These taxes are towards the maintenance of necessary transport infrastructure all over the State. A part of these taxes are to be shared with local bodies for the upkeep of infrastructure,” Mr. Prakash added.

The MGP alleged that the corporation was not efficient in collecting property tax and a new cess would mean a greater burden on honest tax payers.

The authorities had not conducted a random verification of the property tax paid under ‘self assessment’. As a result, even persons who paid tax may be attracted to cheat and pay less.

The parishat said additional revenue could be generated only if private layouts and revenue layouts in the city were brought under the tax net.

The MGP also took objections to levies collected for a specific purpose not being spent on that cause. Calling for a white paper on the financial condition of the MCC, the parishat said it was time to question how local bodies could collect tax based on Government Orders while there was no audit of the performance of such bodies.

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