Sanjeev Pargal
JAMMU, Oct 31: Two important legislations regarding imposition of property tax in the State and constitution of Property Tax Board have been hanging fire for last more than one and a half years now despite being approved twice by the Legislative Assembly as a Joint Select Committee (JSC), constituted to go into the two bills in the month of April this year, was yet to hold even its first meeting so far.
Delay in introduction of urban tax reforms has stalled grant worth several crores by the Central Government. Chief Minister Omar Abdullah had said on floor of the House that there was no alternate to urban reforms including imposition of property tax in the State in lieu of the grants blocked by the Union Government.
Official sources told the Excelsior that the bill for imposition of property tax and setting up of Property Tax Board, which was passed twice by the Legislative Assembly during its budget session in March 2011 and 2012 was stalled by the members including those belonging to the coalition partner, Congress (I) both the times leading to constitution of a JSC. Deputy Chief Minister Tara Chand, who holds the charge of Housing and Urban Development Department, which was responsible for imposition of property tax and constitution of Property Tax Board, heads the JSC, which has not met even once since its constitution in April this year by Legislative Council Chairman, Amrit Malhotra.
“We have asked the Housing and Urban Development Department to convene the meeting but they have not done it so far’’, an official of Legislative Council Secretariat said.
Reliable sources said the Congress wanted to delay the imposition of property tax as much as possible as it could annoy the people.
This was despite the fact that the Central Government has repeatedly asked the State Government to implement urban tax reforms before the release of grants blocked in some sectors.
The Legislative Assembly first passed the property tax bill on March 31, 2011 at the fag end of last year’s budget session amidst boycott by entire opposition. The bill was stalled in the Council by the opposition as well as some Congress members. As the bill was not taken up for one year, it was again introduced and passed in budget session of the Assembly in March, 2012. It went to the Council and was again stalled with consensus emerging on constitution of the JSC to go into the structure of property tax, which had to be imposed in the State for the first time.
The Chairman had constituted the JSC in April this year. With nearly seven months after its constitution, the JSC hasn’t hold even a single meeting so far.
Significantly, this was second Select Committee for the bill. The first Select Committee had been set up in September-October session of the Assembly in 2010. Tara Chand also headed this Committee but it had submitted its report in March 2011 on the basis of which the bill was passed.
The Central Government had blocked urban reforms grant in various sectors for the State Government for not implementing various reforms including the property tax. Though grants in some sectors were released, they were pending in many other sectors, sources said, adding that this had compelled even the Chief Minister to remark in the Assembly during the budget session that there was no alternate to the reforms.
It was after the remarks of the Chief Minister that the bill was passed in the Assembly for the second time to facilitate imposition of property tax and constitution of Property Tax Board. However, the Council members blocked the move.
The bill proposed that the Municipal Corporations would be entitled to charge a maximum of 10 per cent of taxable annual property used for commercial purposes and 4 per cent on residential property as against 15 per cent proposed in the Municipal Corporation Act of 2000. Land up to 10 marlas and residential construction on them would be exempted from the tax.
The Municipal Councils would be entitled to charge property tax at the rate of 7 per cent of taxable annual value of property for commercial purposes and 3 per cent for residential purposes. The Council wouldn’t charge the tax in case of land not exceeding 12 marlas and building, if any, constructed thereon for residential purposes.
The Municipal Committees would charge 3 per cent tax on commercial property while there would be no tax on residential property within the limits of the Municipal Committees.
The property tax will not be applicable to the persons living Below Poverty Line (BPL), land used for agricultural purposes, hospitals, educational institutions, widows, deserted and divorcee and disabled persons.
The bill had also proposed to increase the age for contesting Urban Local Bodies elections from 18 years to 25 years. It proposed to set up Ward Committees under the chairmanship of Corporators to facilitate the work in the Wards.
The Corporations, Councils and Committees would implement the tax when they are constituted after the ULB elections provided that the bill had been passed by then.
Sources said the Government only wanted to fix upper limit of the tax for the Local Bodies. It was for the Local Bodies to decide on the tax structure. The Government had just given a roadmap to the ULBs on the property tax as a part of reforms suggested by the Centre to avail JNNURM and other grants. It was up to the ULBs to fix the tax structure. They can charge one or two per cent tax instead of three or four per cent on residential property.
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