BMC loses crores in revenue due to holding tax dispute with central institutions: Officials

Bhubaneswar: A dispute over holding tax between Bhubaneswar Municipal Corporation (BMC) and at least 55 central institutions has deprived the civic body of crores of revenue, officials said.

The institutions included research hubs, enforcement, educational and financial entities and some directorates. The long-standing dispute had led to exemption of holding tax for them. Instead, 7% service charge was decided to be collected from them based on a 2009 Supreme Court judgment, BMC officials said. Out of the 55 institutions, six are financial ones, while an educational institute owed Rs 64 lakh to BMC, officials said.


“Based on the SC judgement, a mediation committee was formed comprising the BMC commissioner, deputy commissioner (revenue), a state govt officer and the head of a particular central institution to take a decision to collect 7% holding tax, which was considered as service charge. But many are not paying the service charge as well,” BMC commissioner Chanchal Rana told TOI.

Information obtained by TOI from the revenue section of BMC revealed that many of these central institutions sent letters to the civic body refusing to pay the service charge. “We are not even asking them to pay the total amount. We are asking them to pay 75% out of the calculated service charge,” said a BMC officer.

Holding tax, an important component of revenue, is calculated on the basis of plinth area of the building. The tax assessment varies, as there are different slabs for commercial and residential buildings. Apart from educational institutes, govt and commercial establishments and residential houses pay holding tax every year based on the annual assessment done by BMC. While some have huge current dues, others have both arrears and current dues.