Tedious process for tax waiver

KOLKATA: Mayor Sovan Chatterjee's tax waiver proposal sounds timely for the cash-strapped Kolkata Municipal Corporation (KMC) that is yet to mop up the outstanding property tax that has touched the Rs 2,600-crore mark. This amount has been pending for the last 10 years, sources in the KMC assessment department said.
However, the civic body has to follow a procedure that is less easy than said.The rule book says that the waiver proposal has to be passed in the mayor-in-council meeting and ratified in the KMC House meeting. This is not all. The civic body has to forward this resolution to the state municipal affairs department. The department will examine the proposal and send it to the finance department for its concurrence.
Once okayed by the finance department, the municipal affairs department will prepare a cabinet memo for discussion in the state cabinet. After this, the CM has to table the proposal in the West Bengal assembly. The resolution passed in the assembly will go to the municipal affairs department that will notify the waiver scheme.
The reasons for this procedure are obvious. "Such a proposal is usually mooted in an extraordinary situation. The civic body has to explain in the proposal why such a huge amount of tax remained unpaid. Authorities should not use it on a regular basis because then it would act as a disincentive for tax payers," a senior tax department official said.
A cursory glance at the break-up of tax arrears reveals that 80% of the outstanding Rs 2,600 crore tax has accumulated due to default of commercial and big property owners. "I have come to know about the KMC's initiative to offer such a waiver scheme. Let the KMC give me details of the proposals. I can't comment right now," Firhad Hakim, the state municipal affairs department minister said on Monday.
A tax defaulter under the waiver scheme is required to pay only the principal outstanding amount. The interest and penalty on the principal amount are waived off. The Trinamool Congress-run KMC board first introduced such a tax waiver in 2001 and subsequently three years later in 2004 when the civic body mopped up Rs 250 crore through such a scheme. But there are instances when the state government turned down such a proposal. It did so on two occasions - 1988 and 2008 when Kamal Basu and Bikash Bhattacharya were mayors respectively.