The Kozhikode Corporation is not exactly flush with surplus funds. But the laxity in collection of revenue says otherwise.
The audit report of the local body for the year 2010-11, which was published last week, blames the body for not promptly collecting professional tax, advertisement tax, and the rents of shopping complexes and buildings owned by it, which has led to huge loss of revenue.
In the year under consideration, the Corporation has a total amount of Rs.5.15 crore due to it, under the tax and non-tax heads. And if that was not enough, the report says that the Corporation ‘does not even maintain an arrears demand register having details of the amounts to be collected, even after repeated suggestions to do so in previous audit reports.’
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As per section 539 (1) of the Kerala Municipality Act 1994, the maximum time period to collect the outstanding tax will be three years from the date of legal action on the specific case. If the money is lost to the Corporation due to delay in action on the part of the officials, the amount has to be collected with 12 per cent interest from those responsible.
With respect to profession tax where the amount due is Rs.38.21 lakh, the report says that tax was not collected as per the half-yearly income in the returns filed.
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Erroneous calculation
The calculation of half-yearly income was also found to be erroneous as surrender leave salary, bonus, and interim relief were not considered.
There were losses in collection of licence fee from various buildings in the Corporation area, owing to technical errors.
In the case of a room in the stadium complex which once housed the handloom cooperative society, the newly fixed rent after change of ownership was conveyed neither to the council nor to the finance standing committee.
In the case of three rooms at Indira Building in Palayam, a concession had to be given on the licence fee for six months due to problems arising in the change in ownership. The previous owner delayed in taking away his movable assets that prompted the new owner to request for a reduction in licence fee.
The revenue from tax collection has also come down in 2010-11 compared to the previous year. The profession tax collected was Rs.6.73 crore compared to the Rs.9.05 crore in the previous year.
The amount from Dangerous and Offensive (D&O) licence fee was Rs.57.66 lakh compared to Rs.1.56 crore. The rents from shopping complexes also came down from Rs.9 crore to Rs.5.31 crore. But the advertisement revenue showed some improvement from Rs.29 lakh to Rs.60.67 lakh.