Chandigarh MC ends property tax rebate for govt buildings
In a bid to tide over the ongoing financial crisis, the Municipal Corporation (MC) has decided to abolish the 25% property tax rebate for government buildings. These buildings will now be required to pay the full 3% service tax, aligning with the tax levied on commercial properties.
The decision was taken during the MC House meeting, during which councillors highlighted the pressing need to enhance the MC revenue. Until now, the government buildings were paying only 75% of the 3% tax under a rebate of 25%. The financial health of the MC has deteriorated as these buildings repeatedly defaulted on tax payment.
The MC revealed that government and commercial buildings owed ?250 crore in property and service tax, which makes a significant portion of the MC annual revenue. Out of this, ?187 crore is locked in litigation or disputed cases. Residential properties also owe the MC ?15.8 crore in unpaid taxes.
The list of major defaulters includes various government departments. The autonomous institutes such as Panjab University, PGI and Punjab Engineering College are yet to pay their dues, though they were not eligible for the 25% rebate.
During the meeting, councillors expressed resentment over the continued default on payment by government establishments. “If poor residents can pay their 100% tax, why should the government enjoy a 25% rebate? If the MC can disconnect water connections for non-paying residents, strict action must also be taken against government buildings that fail to pay their dues,” the councillors argued.
The councillors emphasised the urgency of recovering arrears from these institutions. “Considering the financial state of the MC, we propose that the service tax on government buildings be raised to match that of commercial and residential properties. Immediate steps should also be taken to recover arrears and penalise defaulters.”
The decision on withdrawing the tax rebate will only come into effect after a final approval from the UT Administration.
