Bhubaneswar Municipal Corporation is going to crackdown on holding tax defaulters.

Bhubaneswar, March 27: Authorities of the Bhubaneswar Municipal Corporation (BMC) have finally decided to crack the whip on major defaulters of holding tax. From Tuesday, civic bosses will serve “distress warrant notices” on major defaulters of holding tax during the current financial year.

Sources in the BMC said while a large number of people had paid holding tax voluntarily, owners of some major business houses, showrooms and official complexes were yet to pay their dues.

“The big players earning crores of rupees in rent are not at all interested in cooperating with the tax officials. For example, a complex on Sachivalay Marg in Bhouma Nagar has offices, restaurant and some financial companies on its premises, all on rent. But people owning the complex are not willing to pay holding tax,’’ said deputy municipal commissioner, Priyadarshi Mohapatra.

Another big player in automobile business with showrooms on Cuttack Road and along National Highway-5 (NH 5) near Pahala is also not cooperating with the civic officials regarding collection of holding tax.

A prominent commissioning and forwarding agent in the same locality is also not depositing its holding tax.

“These violators, on the other hand, are claiming that as the area of their operation is outside the limits of the municipal corporation, they are not supposed to pay holding tax. But, they are within the BMC’s limits,” he said.

A senior BMC official said: “A prominent showroom of exclusive fabrics on Janpath and a nearby hotel-cum-market complex are also not cooperating with tax officials either in depositing the holding tax amount or in reassessment of their premises. While these people are earning a lot because of their advantageous location, civic amenities and other facilities extended by the civic authorities, they are not depositing their contribution while ordinary citizens are doing it voluntary.’’

Mohapatra said: “BMC can earn holding tax to the tune of Rs 3 crore from the major defaulters as they are evading it for last two years or more.

“Till March 31 last year, the holding tax collection was around Rs 12 crore but this year it would reach Rs 19 crore, which is an increase of 60 per cent. The figure might reach Rs 20 crore if the present trend continues.”

BMC officials also said that some of the prominent defaulters of holding tax would be served distress warrant notice. The civic bosses have sought police assistance to deal with situations that might arise once the notice is served.

In fact, after formation of the municipal corporation, the civic authorities have to collect property tax, but as the legislation for the new tax regime is under process, the BMC authorities are still collecting holding tax as per Orissa Municipal Act, 1950, under the supplementary and transitional provision of Section 693(3) of the Orissa Municipal Corporation Act, 2003.

However, as per the December 15 notification, buildings were assessed under two categories — residential and building or premises on rent. Following the notification, BMC tax officials were given special mobilisation and assessment training to boost the holding tax collection.

As per the data available with BMC, more than 80,000 houses are currently included in the holding tax net and there would be more than 60,000 houses still outside it. Even many houses are yet to be reassessed as they are paying holding tax as per the old assessment norms.