The Telegraph
Wednesday , January 9 , 2013
Since 1st March, 1999
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Seal on assets seizure for tax default

The cabinet on Tuesday approved rules for collection of municipal taxes framed under the Bihar Municipality Act, 2007, authorising the urban local bodies to take punitive action against those who owe them dues.

The new rules empower urban local bodies to stop providing municipal services, attach property, realise its tax dues by selling the immovable assets of tax defaulters.

“All the urban local bodies — municipal corporations, municipal councils and nagar panchayats — of the state have been given power to realise their municipal dues,” cabinet co-ordination department principal secretary Vijoy Prakash told reporters in a post-cabinet briefing on Tuesday.

At present, there are no such rules according to which the urban local bodies can take action against the tax defaulters.

Instead, the tax was collected through certificate case initiated by the district magistrate.

Now, the local bodies can take action against the tax defaulters.

With new rules being put in place, the local bodies can issue demand letter to the defaulters for payment of such dues. If they don’t pay, these bodies can impose a heavy interest for delay.

Prakash added that the urban local bodies could stop providing municipal services if the defaulters do not deposit the amount.

Besides, the bodies can also issue orders for attachment of property before selling it off for realising their own share of dues, which have arisen on account of municipal taxes over a period of time.

There are total 114 urban local bodies across the state, which are spread in seven municipal corporations, 38 municipal councils and 69 nagar panchayats.

Officials of the urban development department acknowledged that the situation of collection of municipal taxes in the state is not satisfactory at present.

Urban development department secretary said: “Not more than 50 per cent of the holdings across the state are covered under the ambit of municipal taxes collection at present. Not more than 40 per cent of these 50 per cent holdings are paying the municipal taxes in practice. However, the urban local bodies were not able to take any action against the defaulters except coaxing them.”

The secretary added: “There was an urgent need for making provisions to increase the modes of tax recovery for increasing tax and non-tax revenues for the urban local bodies. The new rules would give such powers to the local bodies.”

The poor condition in collection of municipal taxes was evident from the corresponding figures of Patna Municipal Corporation over the past few years.

Against the target revenue of Rs 32 crore, the civic body collected Rs 17 crore in the 2010-11 fiscal and Rs 28 crore in 2011-12.

Sources in the PMC said the target for total holding tax collection in the 2012-13 financial year was Rs 32.23 crore, out of which Rs 25.3 crore are to be collected from private buildings and Rs 6.2 lakh are to be collected from government buildings.