Ahmedabad: Work-from-home invites commercial property tax! – ET RealEstate

AHMEDABAD: At a time when a large number of offices has switched to work from home (WFH) mode to tide over the Covid-19 pandemic, it has proved costly for a local ceramic trader. The Ahmedabad Municipal Corporation has imposed commercial property tax on the trader for ‘commercial use’ of his residence after the officers found display of ceramic articles in his home.

The AMC has also directed Suresh Tahiliani, owner of the ceramic business in Naroda, to stop using a portion of his residence as workplace as he had earmarked a small space of the property as his office following the lockdown period.

Though Tahiliani stopped using the space as office, he was forced to move the city civil court against the AMC’s notice which also directed him to restore the property to its original status of “residential” . Last week, the court stayed any action on AMC notice at least till the civic body explained its position before the court.

Tahiliani had purchased a residential property, demolished the structure and rebuilt it in 2016. A year later, he obtained the building use permission for residential purpose. He has been paying property tax to the civic body under the category of residential property for two years.

In July this year, he was asked to pay commercial tax for the property for 2019-20 after civic officials found an office being run from the premises. Tahilani had no issue with paying commercial tax, but AMC issued him a notice asking to stop using the property for commercial purposes and restore the building to its original position.

Tahilani wrote back to AMC in October explaining how he obtained BU permission after reconstruction three years ago. It was only for a short time after the lockdown that the small portion of the premises was used as an office where ceramic articles were also showcased.
Ahmedabad: Work-from-home invites commercial property tax!‘WFH doesn’t mean setting up shop at home’

Ahmedabad Municipal commissioner Mukesh Kumar said the merits of the case would have to be examined. “Usually, WFH does not mean that you can set up a shop at in your house. WFH means having a personal workstation, a few files and a corner room to yourself. AMC does entertain applications for converting part of residential properties for commercial use, but then there is a procedure.”

“We receive applications from citizens for converting part of the residence for commercial use for requirements under Shops and Establishment Act or for obtaining professional tax certificates. But when people don’t reveal that part of their properties are used for commercial purpose we have to go by the book. At present AMC does not have any tax exemption policy WFH policies,” says a senior AMC tax official.

AMC did not respond to Tahilani’s representation, and he went to civil court. The AMC has not responded to the court’s notice and the court thus stayed any AMC action pending reply.



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Dehradun civic body to collect commercial property tax from new wards – ET RealEstate

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DEHRADUN: The Dehradun Municipal Corporation (DMC) has prepared a detailed plan to collect commercial property tax from business owners in the 32 newly-added wards of the district.

The officials have also finalised the rate of commercial property tax depending on parameters like the width of the road outside the establishment and type of construction.

The rates for levying the commercial property tax have been broadly described under two categories — where the road is less than 12 meter wide and where the road is more than 24 meter wide.

In 2018, 72 villages were added to the municipal limits of the city which formed 32 news wards. The state government had recently released a notification exempting the house owners from paying house tax. However, the commercial property owners were not included in the notification.

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Chandigarh civic body seals 29 commercial buildings in last nine months – ET RealEstate

CHANDIGARH: After showing reluctance to deposit commercial property tax even after getting regular notice and subsequent attachment or sealing notices and sufficient time for the same, Municipal Corporation, Chandigarh has sealed 29 commercial properties throughout the city in nine months of this year from January till September. All these commercial properties are located in the key commercial areas of the city, like sector 22, 26, 35, 36, 37, 38, 20, 34, 40 Manimajra etc.

As per records of the civic body authority, these commercial properties comprise both SCO (shop-cum-office) and booths of different trades of business. Sources revealed that majority of these commercial properties were carrying lakhs of rupees arrears of previous years, they did not pay their arrears, which forced the MC to take stringent actions against them and after sealing they deposited the money.

“Sealing is not our motive, but we didn’t have any other option in the cases of these 29 properties, as they were intentionally not making the payments. The moment we sealed their commercial establishments, they deposited the money and only after that their properties were unsealed or allowed to open for doing their normal business in routine manner. We were even ready to make installments in the cases, where tax payers were not able to pay the full amount, but despite they, tax payers showed the reluctance to pay their property tax amount and pending arrears”, a senior official revealed.

Since commercial property tax is the key segment of source of income for the Municipal Corporation, Chandigarh, they keep special vigil over this segment of tax payers. From the property tax of both commercial and residential, major chunk of amount come only from the commercial properties, as residential properties tax amount is quite less as compared to commercial tax and moreover in residential segment, all small, EWS, rehabilitation colonies were exempted from tax ambit, which is quite big number of residential properties.

As per records of the civic body authority, there are around 1.10 lakh property tax payers in the city. Out of which around 85 thousand are residential property tax payers, while there are around 26 thousand commercial properties have been identified in the city, those are falling in the tax ambit.



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HC seeks civic bodies’ stand on plea against commercial property tax on lawyers’ offices – ET RealEstate

NEW DELHI: The Delhi High Court Wednesday sought response of the three municipal corporations here on a plea by a lawyers’ association challenging commercial property tax on advocates’ offices.

A bench of Chief Justice D N Patel and Justice Prateek Jalan issued notice to the three local bodies — South Delhi Municipal Corporation, East Delhi Municipal Corporation and North Delhi Municipal Corporation — seeking their stand on the petition by the Delhi High Court Bar Association (DHCBA).

The court also asked DHCBA to advise its members to file tax returns for their residential properties.

The petition has challenged the municipal authorities’ decision to treat the use of premises by an advocate as ‘commercial activity’ and impose taxes accordingly.

The plea, filed by DHCBA through its President Mohit Mathur and Secretary Abhijat, has challenged an assessment order passed by SDMC in November 2018 and any other notice issued thereafter by the three MCDs for self assessment of property tax returns of lawyers offices under provisions of the Delhi Municipal Corporation (DMC) Act.

It has said that under the DMC Act, ‘use factor’ system was introduced in the new method of assessment of property tax and for advocates, there is no specific category but they are being charged on the basis of methods applicable on commercial properties which attract the highest tax.

“All the professionals form one class but the legal profession has been treated as part of commercial activity, which is illegal, arbitrary and contrary to the law laid down by this court,” the plea has said, adding that the office of legal professionals should be ‘use factor’ 1 which is for residential and public purpose.

It has also said that the Bar Council of Delhi sent a representation to the municipal corporations on July 21 for reduction of the ‘use factor’ 4 to 1 for levy of property tax in respect of offices of advocates in Delhi.

‘Use factor’ 4 is for business buildings which attracts the highest tax.

“Lawyers appear before the court to represent their clients but in effect assist the court to dispense justice and this cannot be a business or any commercial activity,” the plea, filed through advocate Nikhil Mehta, has said.

As an interim relief, the plea has sought to stay the operation of november 2018 notice issued by the authorities for self assessment property tax return of the lawyers office.



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