Bangalore

There’s a tug-ofwar going on between the BBMP and small-scale industries in Bangalore. Going by available statistics, there are nearly 80,000 small-scale industry units that come under BBMP limits, but almost 70-80% of them have not paid property tax in protest, for the past three years! On a rough estimate, the loss in revenue for the Palike amounts to at least Rs 150-200 crore a year.

“Why must we pay when we are not heard even after several representations?” asks J Crasta, immediate past-president of FKCCI. Incidentally, during his tenure as president, the Federation had also written to its members not to pay property tax until their issues are sorted out, he admits. One of their main complaints against the revised Self-Assessment Scheme (SAS) law for property tax is that it broadly categorises all properties under residential and commercial. There is no separate slab for industries.

“Technically speaking, the rate for industries has not been fixed till now. But the Palike wants to collect it under the commercial slab, which is not feasible for us. Though the rates have remained the same as in SAS 2000, a majority of these industries have seen a shift in zones, leading to a stark rise in property tax under the revised SAS,” explains N S Srinivasamurthy, FKCCI president.

Their recent survey — comparing the tax trends for industries in other states — has led to more heartburn. “A Btype shed of 5,000 sqft in other states like Tamil Nadu is taxed Rs 2,500, but in Bangalore, a similar industry is taxed Rs 13,000-14,000. We have already written to the government and made several representations on the exorbitant hike in tax under revised SAS. We will not pay until this issue is sorted out,” Srinivasamurthy added.

BBMP officials say, “The shift in zone has also been an issue with many residential properties as well. But a majority of them have paid their tax. Further, BBMP’s investment on developing the earlier CMCs must also be considered. All industries also get added benefits — of their total built-up area, 25% is considered utility area and charged at 50% of unit area value (UAV). Owner-occupied industries get flat 50% rebate in UAV.”

A majority of us have not paid property tax. When this area was earlier under CMC, we paid only Rs 2,500 as property tax. Now, under the new tax structure, there is a 300% increase. Most of our units are covered by asbestos sheets and have only cement flooring. We have no proper water and power connections. We are only manufacturers, not commercial people. What we want is a separate category for industries, that’s followed even in neighbouring states.

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