BBMP Proposes 2% Land Transport Tax For Bad Roads

BBMP Proposes 2% Land Transport Tax For Bad Roads

BBMP Proposes 2% Land Transport Tax For Bad Roads

The Bruhat Bengaluru Mahanagara Palike (BBMP) has proposed the imposition of a two per cent cess by the name Land Transport Cess. The BBMP council is planning to submit this proposal to the state government.

Previously, levying a Land Transport Cess was a violation to the Karnataka Municipal Act (KMA), but through Act 31 of 2012, which was effective from October 7, 2013, levy of Urban Transport Cess was added in the Act. According to the amendment, this cess can be levied at not more than two per cent on the property tax levied and collected under Section 103 or 108A of the KMA, which will be rounded off to the nearest rupee. 

The Act also mentions that “nothing in this section shall affect the operation of the provisions of any other Act and the levy of Urban Transport Cess under this Act is in addition to, and not in lieu of, any other tax or cess that may be levied under any other law for the time being in force.” Funds so collected would be credited to the Urban Transport Fund and the state government can prescribe rules about the manner, collection, maintenance and application of these funds. While the Council proposes this tax, the state government can check whether the KMA needs to be suitably amended.

Against the tax

The BBMP opposition is not in favour of this levy citing that it would be an additional burden on property taxpayers. They are also of the opinion that property taxes collected from 19 lakh households should be sufficient for development work.

BBMP’s financial health

This year, the BBMP collected Rs 1,413 crore as property tax and successfully brought in 18.35 lakh households out of the 19 lakh properties. In 2016-17, property tax collected stood at Rs 1,679 crore while the target was Rs 2,300 crore. In 2017-18, it collected only Rs 1,655 crore which was only 63 per cent of its target.

Last year, the civic body had outstanding loans to the tune of Rs 1,434.39 crore from Housing and Urban Development Corporation Ltd (HUDCO). However, with State Bank of India swapping it for a lower rate of interest, these loans are down to Rs 714.59 crore. It managed to save up Rs 10 crore that would have otherwise gone as interest, reports The Hindu.

As mortgage, BBMP had to set aside 11 properties of which it managed to take back  Kempegowda Museum, Mayo Hall, Johnson Market and Malleswaram Market. Now, it is hoping to take back Rajajinagar Complex and Pottery Road Slaughter House. If it is successful, Public Utility Building, K.R. Market, West zone office, Dasappa Hospital and Kalasipalya Market would be the only five to be reclaimed.

Currently, the BBMP has been levying library cess, labour cess, garbage cess and beggar cess. These are linked to the property tax collected by BBMP. Given that the financial health of the civic body isn’t good, the new cess seems to be its only way out to bring in some funds.

Last Updated: Fri Aug 31 2018

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