BHUBANESWAR: Around 5,000 residential holdings in Bhubaneswar are being used for commercial purposes in violation of tax norms, as a result of which Bhubaneswar Municipal Corporation (BMC) is losing huge tax revenue, according to a survey by the civic body.
The matter came to light when BMC officers conducted a door-to-door survey between November and February and through complaints by residents to ward officers.
On Wednesday, BMC deputy commissioner (revenue) Priyabrata Padhi, said, “There are 1.20 lakh holdings in the city, of which, 5,000 violations of such nature have been detected. Tax will be assessed afresh in case of holdings where exceptions have been found. The nature of holdings keeps changing and it needs a constant follow-up to ensure that BMC has accurate information about holdings. If a building has a ground floor with only a residential set up and the following year, the first floor comes up which is used for commercial activities, tax has to assessed accordingly.”
Since holding tax is more in case of commercial buildings, many people hoodwink the civic authorities and don’t put up any signboard of their commercial functioning.
BMC officials said with the financial year about to end, the civic body has expedited holding tax collection. The information available with it revealed that there are around 100 defaulters (who have holding tax arrears pending against them of previous years) with more than Rs 10 lakh dues per head.
Meanwhile, the civic body has got the green signal from the state government to start collecting holding tax from establishments that have been set up on land belonging to Odisha Industrial Infrastructure Development Corporation (IDCO). Till now, BMC was not empowered to collect holding tax from such establishments till the last financial year as buildings that came up on Idco land were getting the basic facilities – drain, road and streetlights from IDCO and not from BMC. This year, BMC has set a target of collecting Rs 115 crore in holding tax by the end of March.
Holding tax is being collected by BMC on the basis of the Orissa Municipal Act, 1950, which still follows the old rates. Since land value is an important determinant for tax calculation and that value has increased manifold at various locations of the city, the final calculation of tax amount went up in the revised tax assessment.
The Orissa high court put a break on tax collection as per the revised rates of 2021. Since then, tax is being collected on the basis of old rates.
