Mumbai's property tax billing for the 2023-24 fiscal year has been delayed due to the BMC's retrospective tax assessment. To address the issue, the civic body plans to send provisional bills with a 10% hike to taxpayers next month. The problem arose from the BMC's adoption of the capital value system for property tax calculations, retrospectively from 2010. In 2019, the Bombay High Court invalidated certain rules related to retrospective taxation. Though the BMC approached the Supreme Court, it got no relief and was asked to create new rules and issue fresh bills. BMC would need to refund significant amounts to affected taxpayers.
Legal complexities have led to a delay in property tax billing for BMC's 2023-24 fiscal year. To address this issue, the BMC plans to send provisional bills with a 10% hike to taxpayers starting next month.
The problem arises from the BMC's adoption of the capital value system for property tax calculations, retrospectively from 2010. In 2019, the Bombay High Court invalidated specific rules related to retrospective taxation. The municipality challenged this decision in the Supreme Court, but they received no relief. Consequently, the Supreme Court had instructed the BMC to establish new rules and issue fresh bills to taxpayers.
This ruling requires the civic body to refund substantial sums to those taxpayers who made payments based on the capital value system between 2010 and 2012. The BMC now faces the challenging task of reworking the capital values of all properties and managing the refunds or adjustments of excess amounts collected from citizens in future bills.
Given the substantial amount involved, the municipality has requested amendments to the BMC Act from the state government. As the matter remains unresolved, property tax bills for the period from April 1 to September 30 have not been sent out yet. Nevertheless, the municipality has already collected arrears from the previous year, totalling Rs 496 crore. To prevent further delays, they plan to issue provisional bills soon based on the ready reckoner rates.
The delay in property tax billing has financial implications for both the civic body and taxpayers, as it involves not only issuing provisional bills but also managing refunds for past payments. The ultimate resolution of this issue, including potential amendments to the BMC Act, remains uncertain. Nevertheless, the BMC aims to address the situation proactively to minimize disruptions for taxpayers and maintain revenue collection.
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