According to officials, the tax on rented commercial properties was increased on the recommendations of the Municipal Valuation Committee-3 (MVC-3) which was implemented in April last year.
The MVC-3 had recommended to nearly double the property tax on rented commercial premises, telecom towers, vacant commercial lands, vacant industries, marriage halls, banquets, educational institutions, entertainment and recreation facilities.
These recommendations were implemented in April 2020 but were approved in July 2020 with retrospective effect.
The decision to roll back tax hike was taken in the standing committee meeting of the SDMC on Tuesday.
According to SDMC officials, the decision to roll back tax hike will benefit traders and business community but will dent the coffers of the SDMC, which is already facing fund crunch.
“With this move the civic body is expected to bear losses of Rs 70-80 crore per year. Under SDMC jurisdiction, there are around 9000 commercial properties that have been rented out so we were anticipating good revenue generation,” a senior SDMC official said on the condition of anonymity.
SDMC Standing Committee Chairperson, BK Oberoi said that the decision was taken in public interest and it will benefit a large number of traders and revive industries that are on the brink of collapse due to the coronavirus pandemic.
“We have decided to 100% roll back the tax hike which was done on recommendations of the MVC-3. Now the status quo of 2019 tax rates will be maintained. It means that people will have to pay tax on rented commercial properties and other mentioned categories as they used to pay in 2019,” Oberoi said.
He said the roll back decision will now be approved by the House of the SDMC and then it will be implemented.
He said that the civic body had received many representations regarding difficulties being faced by traders in paying extra tax so the decision was taken for public welfare.
“Economy has slowed down and industries are suffering due to COVID-19 pandemic. So it was necessary to provide relief to traders to keep the economy going. The decision was taken in larger pubic interest,” Oberoi said.
As per the MVC-3 recommendations, owners of commercial properties, that have been rented out, along with other mentioned categories had to pay double amount of the property tax against such establishments.
This would vary for rented commercial properties depending on the location, area of the property and other technical factors.
“Now owners of commercial rented properties and other categories will have to pay property tax in accordance with older tax slabs as they used to pay in 2019,” another SDMC official said.