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The Brihanmumbai Municipal Corporation (BMC) has sought clarity from the Mumbai Metropolitan Region Development Authority (MMRDA) regarding an INR 550 crore unpaid property tax linked to J Kumar Infraprojects Limited. The dispute arises from seven plots allocated by MMRDA for metro construction casting yards and ready-mix concrete plants. While Clause 2.7 of the tender indicates that MMRDA is responsible for property tax, lease agreement Condition 5 assigns the liability to J Kumar Infraprojects. The contractor insists MMRDA must pay, while MMRDA maintains the tax burden rests with the contractor. The resolution of this issue is crucial as BMC pursues its INR 6,200 crore property tax target.
The Brihanmumbai Municipal Corporation (BMC) recently contacted the Mumbai Metropolitan Region Development Authority (MMRDA) concerning an overdue property tax amounting to INR 550 crore, attributed to J Kumar Infraprojects Limited. Advertisement
As per a letter from the BMC?s joint municipal commissioner of the assessment and collection department, despite multiple reminders, J Kumar Infraprojects maintained that, according to a contractual clause, MMRDA was responsible for the tax payment. The contractor had been allotted seven plots across various wards?H/East, H/West, K/East, P/North, and M/West?by MMRDA for establishing casting yards and ready-mix concrete (RMC) plants to facilitate metro construction projects.
The clause 2.7 of the tender specifies that property tax for land allotted by MMRDA for casting yards should be borne by MMRDA, whereas other taxes are the contractor's responsibility. However, during property assessment, the tax liability was assigned to J Kumar Infraprojects under Condition Number 5 of the lease agreement, thereby making the company liable for payment.
J Kumar Infraprojects has been actively executing metro construction projects for MMRDA, including Mumbai Metro Line 2B (D N Nagar to Mandale). Officials stated that during discussions regarding pending dues, the contractor reiterated that the liability rested with MMRDA. The letter urged a clear determination of whether MMRDA or the contractor was accountable for the outstanding tax, so payment could be processed accordingly.
The BMC?s property tax target for the current financial year stood at INR 6,200 crore, with payments due by December. Despite the imposition of a 2% penalty for late payments, several high-value defaulters, including J Kumar Infraprojects, had not settled their dues for years. He stressed the need for firm action against those financially capable of making payments but failing to do so.
An MMRDA official, when contacted, clarified that the authority?s vacant land had been temporarily assigned to J Kumar Infraprojects for metro-related work. As per the terms of land allocation, the contractor was responsible for paying property tax. The official further stated that J Kumar Infraprojects had already paid the tax for certain plots for the period between 2016 and 2019. The authority had communicated to the BMC that the pending tax responsibility rested with the contractor. Additionally, regarding land allotted to Mumbai Metro Rail Corporation Ltd. for Mumbai Metro Line-3, which was subsequently allocated to J Kumar Infraprojects, the property tax was to be paid by Mumbai Metro Rail Corporation. This clarification was also conveyed to the BMC.
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