BMC missed the property tax target third time

India's richest municipal corporation missed the target of property tax revenue in the finantial year 2018-19, a third time in a row. The civic body had missed the target in the last two finantial years also.  The civic body has managed to collect Rs. 5082 crore property tax against the set target of Rs. 5206 crore in the finantial year which ends on March 31. The main reasons are disputed bills of capital base tax and apathy of commercial establishment. 

Property tax is the main source of income of the Brihanmumbai Municipal Corporation (BMC) after the closure of the octroi tax. Though BMC is getting compensation from the state government for octroi, it doesn't have control over it. BMC estimated Rs. 5206 crore revenue from the property tax in 2018-19.  But due to disputed bill amount increased by 30 per cent than the previous year BMC officers from tax and asseessment department couldn't manage to hit the target despite lots of struggle. by the end of February BMC had collected Rs. 3860 crores. In the last month more than Rs. 1400 crore has been collected by the civic body. "Many residencial societies and commertial establishments pay property tax in the last month. We also take action against defaulters. so the property tax collection rose more than one thousand crores," said an official from the civic body. 

But this is not the first time when the richest civic body missed the revenue target. From 2016-17 BMC is not able to collect the estimated amount of property tax. Even another source of income like development plan department is struggling to meet the target. 

BMC introduced capital base property tax bill in 2012. The dispute cases and the money involved in it is increasing every year. The disputed bills are the ones, on which concerned parties have taken objection. They have challenged them in courts and hence BMC cannot take action against them till the court gives its ruling. Even slow down in infrastructure and commercial business affects the property tax collection. BMC even has to return Rs. 800 crores in capital value base tax where the court ordered against it. Meanwhile, the decision of a property tax exemption for houses up to 500 square feet in size will add trouble to collect property tax in the current financial year.