Revenue considerations are pushing GVMC to take a relook at Vacant Land Tax, writes G.V. Prasada Sarma

Vacant land tax has always been a contentious issue with stiff opposition from citizens and various quarters whenever the Greater Visakhapatnam Municipal Corporation took it up.

When in 2007 it was sought to be collected there was uproar with several citizen organisations and political parties opposing it leading to the issue being put on the back burner. Later, it has put up boards at vacant land taxes asking owners to pay up the tax but there is not much of a response. The site owners seem to be happy that their land is secure though the identity is not revealed.

But revenue considerations are pushing GVMC to take a relook at VLT. In its budget estimates, revenue from VLT is shown as around Rs.100 crore. But in reality a few crores is being realised.  Now, to improve the collection, it proposes to take the services of ‘facilitators’ to trace the owners of the vacant plots, communicate with them, make them come forward with the documents so as to levy the tax.     

But since last year the municipal corporation has been collecting VLT for a period of three years at the rate of 0.5 per cent a year- totalling 1.5 per cent.

The issue was represented by the Confederation of Real Estate Developers’ Associations of India in September last to the Municipal Commissioner. But by the time a positive decision could be taken, the Municipal Commissioner was transferred.

With the corporation insisting and in fact collecting the VLT at 1.5 per cent they again submitted a memorandum to the Principal Secretary, Municipal Administration and Urban development, B. Sam Bob, who is the Special Officer of GVMC, during his recent visit. 

Their contention is that in no other corporation the tax is being collected for three years and even in Hyderabad only 0.5 per cent is being levied. It was also pointed out that the builder was paying building licence fee, development charges, betterment charges, drainage cess, open place cess etc once the plans are approved and this comes up to Rs. 400 an sft. CREDAI took objection to GVMC demanding VLT/property tax on the old, demolished building during construction.

“Once the construction begins, it does not come under the purview of vacant land tax/property tax.

It will become double taxation if VLT/property tax is collected during the construction period,” CREDAI contends. CREDAI Visakhapatnam Chairman M.V.V. Satyanarayana says the corporation is demanding that VLT be paid during the time of construction and if the new building is coming after demolition of an old one property tax should be paid for the old building which does not exist. It is not at all justified, he says.However, GVMC officials say that Visakhapatnam Corporation alone is not collecting VLT for more than one year.

Guntur, Rajahmundry and Vijayawada are also collecting the VLT. The AP Municipal Act is silent on the issue. Hence it depends on how it is interpreted.

VLT has to be paid ever since the corporation came into existence or at least when the person presently holding the land purchased it, says Deputy Commissioner (Revenue) R. Somannarayana. But only a period of three years has been decided, he says.

The Special Officer has asked the Municipal Commissioner to send a report on the issue. Once it is sent we hope a positive decision will come, says Mr. Satyanarayana.        


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  • Since last year the municipal corporation has been collecting VLT for a period of three years



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  • Special Officer asks Municipal Commissioner to send a report on the issue




  • Revenue considerations are pushing GVMC to take a relook at VLT. In its budget estimates, revenue from VLT is shown as around Rs.100 crore. But in reality a few crores is being realised.  Now, to improve the collection, it proposes to take the services of ‘facilitators’ to trace the owners of the vacant plots, communicate with them, make them come forward with the documents so as to levy the tax.     

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