Chennai malls and infotech parks may have to pay more tax

Chennai

Mayor Saidai S Duraisamy presented his first budget without hiking property tax rates but hinted that commercial space such as buildings housing multinational firms and IT companies may have to pay more from the next financial year.

Presently, there are different tax slabs for commercial and residential properties and a separate slab for hotels, theatres, private hospitals and marriage halls. Malls, offices of multinational companies and IT parks may be included in this category later.

According to revenue department officials, the 175 sq km area of the old limits of the corporation has 12,417 private companies. Officials said many shopping malls, multinational companies and IT parks have been categorized as ordinary commercial buildings.

“Some of these companies’ profit margins are higher than theatres and hotels, but they are not part of the special category,” said a revenue officer. The amendment in taxation may soon change that. However, National Association of Software and Services Companies regional director K Purushothaman said, “Higher taxes should not be imposed only on IT industries as they are generating huge job opportunities. They should also be considered on a par with other industries.”

The corporation is also planning to survey residential buildings to find those which are being used for commercial purposes. “Many property owners are misusing the rebate of 25% guaranteed by the Chennai City Municipal Corporation Act, 1919, for owner-occupied buildings,” an official said. “Tax assessors are made to believe that the tenants are relatives of the owner and the dwelling units are not rented out,” the officers said. The corporation which has not hiked property tax since 1998, is hoping to mobilise more revenue through these measures.

Statistics show the 2012-13 budget of the Greater Chennai Corporation at just 2,922 crore is much lower that that of other metros and some state capitals.

Source: The Times of India, Chennai