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Ghaziabad Municipal Corporation struggles to recover INR 300 crore in tax dues

Synopsis

Ghaziabad Municipal Corporation (GMC) faces financial strain due to unpaid municipal service charges from government properties. Currently, 69 state government properties owe INR 162.55 crore, while 41 central government buildings have outstanding dues of INR 280.7 crore. Despite efforts to collect, significant payments remain overdue. These service charges, vital for maintaining local infrastructure, are based on the buildings' rental values, yet exemptions granted to agencies like DMRC and NCRTC complicate collections. GMC's struggles highlight the need for clear, enforceable policies to ensure government properties contribute to local services, safeguarding the financial stability of municipal bodies.

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The financial struggles of municipal corporations often stem from the complexities of tax collection, especially when it comes to government properties. In Ghaziabad, the issue has reached critical levels, prompting local authorities to seek clarity on the obligations of central and state government buildings with respect to municipal service charges.

Sanjeev Singh, the Chief Tax Assessment Officer of the Ghaziabad Municipal Corporation (GMC), explained that a central government regulation requires municipalities across India to impose service charges on all government buildings and installations. These fees are essential in covering the costs of vital local services such as road maintenance, water supply, drainage systems, and street lighting. However, a notable portion of unpaid dues in Ghaziabad is alarming.

Currently, 69 state government properties owe the GMC INR 162.55 crore, with INR 157.6 crore remaining unpaid despite repeated attempts to collect through notices. Compounding this issue,41 central government buildings have outstanding taxes totaling INR 280.7 crore, having paid only INR 139.6 crore, even after numerous reminders. This significant gap in payment creates serious challenges for the GMC in maintaining the local infrastructure and providing essential services.

The service taxes imposed on these government properties are determined by the valuation of each building, with the GMC applying a levy of 76% on the annual rental value. Depending on the property type and usage, municipal service charges fluctuate between 33.5% and 75% of the annual rental valuation. In light of this, the GMC has recently issued notices to the Delhi Metro Rail Corporation (DMRC) and the National Capital Region Transport Corporation (NCRTC), urging them to settle their outstanding dues. However, complications arise as the state government has exempted these agencies from municipal taxes through a Government Order (GO), which complicates the efforts of the GMC further.

The extended non-payment of taxes by these government entities underscores an urgent need for a more coherent and accountable tax collection system, particularly for properties controlled by central and state authorities. The GMC, like many municipal corporations, is grappling with the challenge of ensuring timely and equitable tax recovery, necessitating a comprehensive reevaluation of policies to guarantee that all beneficiaries actively contribute to the local economy and services.

In conclusion, while the GMC persists in its efforts to recover these significant dues, the situation remains precarious, with no clear timeline for the resolution of outstanding payments. This ongoing challenge threatens the financial stability of the corporation, which could adversely impact the quality of services available to the residents of Ghaziabad. As local authorities seek to address these issues, it is crucial to implement strategies that ensure accountability and foster a collaborative relationship between municipal and government bodies for the benefit of the community.

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