Govt scraps CVS

Govt scraps CVS
DH News Service, Bangalore:
After much dithering, the State Cabinet on Tuesday said a firm no to the Capital Value System of collecting property tax.

The Cabinet on Tuesday decided to continue the Annual Rental Value-based Self-Assessment Scheme for houses falling under the Bruhat Bangalore Mahanagara Palike (BBMP) limits with a 20 per cent increase in tax rates.

Briefing the media after the Cabinet meeting, Home Minister V S Acharya said that the Cabinet had approved the recommendations of the Cabinet sub-committee headed by Transport minister R Ashok, which suggested the re-introduction of SAS.

The government will soon bring in an ordinance amending the Karnataka Municipal Corporations Act 1976 to enable the Palike to start collecting property tax.

“With the merger of new areas to the BBMP, three different taxation systems were in force in three different areas — old BMP area, old CMC and TMC areas and villages. The Cabinet has decided to have a single tax collection system in the entire BBMP limits,” he said.

The Palike will divide its areas into six zones depending on the value of the property. Each zone will have specific rental value, on which property tax will be calculated. Now, property owners enjoy a 50 per cent exemption on the tax on residential properties.

With the inclusion of new areas to the Palike, six lakh more properties are added to the tax net. The Palike is expected to get an additional revenue of Rs 200 crore from this year. “Increase in tax value under the SAS by 20 per cent will not increase the total collection substantially as people enjoy depreciation of value on old buildings,” the minister said.

From the current financial year, the Palike will collect infrastructure cess and solid waste cess. At present, the Palike is collecting a 24 per cent cess on property tax. Of that, 15 per cent is health cess, six per cent library cess and three per cent beggary cess. Last year, 34 per cent cess was collected from property owners. With the abolition of education cess (10 pc) the cess on property tax has come down to 24 per cent.

However, the Palike is trying to make up the loss by introducing infrastructure cess and solid waste management cess. As per Sec 103- B of Karnataka Municipal Corporations Act 1976 the Palike can collect the infrastructure cess not exceeding Rs 500 per annum, from people who own motor vehicles. Similarly an amount not exceeding Rs 1,000 can be collected as the solid waste management cess per property per month.

Commissioner S Subramanya said the Palike had decided to collect these cesses from the current financial year. However the rules are yet to be framed, he added.

Cabinet highlights
*Property tax to go up by 20 pc
*Infrastructure, solid waste cess from this year
*State approves release of Rs 254 crore for TTMS
*BMIC gets 102 acres of land
*Metro project extended
*Karnataka Park Protection Act to be amended