Stakeholders in the industrial sector are adopting a “wait and watch’’ policy on the separate property tax slab for industries in urban local bodies limits proposed by the government.
Though a long-pending demand, there is a perception that the fineprint would be more revealing and hence are not unduly euphoric about the decision.
Besides, there is unanimity among the stakeholders that the ULBs are supposed to provide necessary services in lieu of the tax paid. But most gram panchayats and some of the town municipal councils are not in position to provide services such as road maintenance, street lights, and garbage removal.
“As the local bodies do not provide any services, almost 85 per cent to 90 per cent of the industrial units do not pay tax to the ULBs. It is only when there is a requirement for some documents that one ends up remitting the tax’’, according to an entrepreneur with a unit in Hebbal Industrial Area.
Recently, a major industrial unit which is spread over a large swathe of land, forked out crores of rupees to the local gram panchayat on the outskirts of the city. This was because of a necessity to obtain vital land-related documents and hence it paid the arears along with interest. “Otherwise the units refrain from remitting tax in the absence of any proportionate level of service’’, the entrepreneur added.
Given the inability of the gram panchayats to provide services due to lack of resources and manpower, the industrial units end up remitting taxes to the Karnataka Industrial Area Development Board (KIADB) for maintenance etc and hence justify their decision to not pay tax to the ULBs.
Suresh Kumar Jain of Mysore Industries Association said they have a similar demand pertaining to water charges. “At present untreated and raw water supplied to industries is considered as commercial in the absence of a separate slab for industries. But industries provide employment and contribute to the GDP of the country and hence it was not prudent to levy commercial rates for water charges. But this is yet to be considered by the Government’’, he added.
Members of MIA and other organisations said the final order and notification will reveal details. In the past, the stakeholders had submitted a memorandum to the government seeking reservation of 70 per cent of the industrial plots for SSIs as they constitute the bulk of the units. But in the final order, the SSIs were allotted only 30 per cent of the land while 70 per cent was reserved for medium and large units, according to the MIA members.
There are also concerns about the pace in which such laws are notified. The constitution of an industrial township authority was announced in the budget many years ago. But it is yet to be notified. Hence stakeholders in industries consider the new development as a mere announcement of intent.
