Cuttack, May 23: Cuttack Municipal Corporation (CMC) is in a quandary after failing to meet the holding tax collection goal in the last financial year. The civic body had managed to collect holding tax of Rs 2.57 crore against a target of Rs 5.63 crore.
CMC’s standing committee for taxation, finance and accounts is of the view that mounting arrears against a large number of holding owners was the reason for the Rs 3.06 crore, or more than 50 per cent shortfall.
“A sizeable amount of the arrears are apparently in doubtful debt or bad debt category. An identification process has already started. A clear picture will emerge after completion of the assessment,” Akhay Beura, head of the standing committee told The Telegraph.
Beura said after completion of the assessment by July end, the council would take a decision to allow another three years for collection of arrears in doubtful category and write off those in the bad debt category.
CMC officials said holding tax was categorised as property tax in Orissa Municipal Corporation Act, 2003. But as rules and by-laws regulating the property tax is in the pipeline, holding tax is being collected for now following the Orissa Municipal Act, 1950.
Any holding within CMC limits is liable to pay holding tax at the rate of 20.5 per cent of the annual rental value of the holding depending on the nature of holding — residential or commercial.
The tax rate for residential buildings is Rs 2 per sqft while for small shops it is Rs 5 per sqft. Kalyan mandap, gold shop, nursing home and hotels are charged Rs 7 per sqft and it is Rs 10 per sqft for banks, insurance companies and showrooms. But a large number of holding-owners in the city remain outside CMC’s tax radar. While there have been an increasing number of constructions in recent years, most of them had not been assessed.
The non-assessed holdings were taking a huge toll on the civic body’s earnings. But the corporation apparently has no clear information on either the number of holding owners or the number of holdings that were yet to be assessed.
“A special drive is on for assessment of the new holdings for collection of tax. We have targeted to include 10,000 holdings under the tax net during 2011-2012,” CMC secretary Ashutosh Samal told The Telegraph.“Tax collectors had included 2,781 new holdings during collection of tax in 2010-11,” Samal said.CMC officials conceded that the holding tax collection was less than the previous financial year. While it was Rs 2.60 crore against a target of Rs 4.06 crore in 2009-10 the collection was Rs 2.57 crore against the Rs 5.63-crore target in 2010-11.
In 2008-09, holding tax collection was Rs 2.09 crore against a target of Rs 3.75 crore. Around 400-500 houses were being constructed every year across the city. Though they were being allotted holding numbers, assessment was not possible till the construction was completed, officials said.
