Bhubaneswar: Govt on Wednesday granted permission to the Bhubaneswar Municipal Corporation (BMC) and other urban local bodies (ULBs) in the state to assess and collect holding tax from areas under Odisha Industrial Infrastructure Development Corporation (Idco), including all industrial clusters and parks, to increase their annual revenues.
The projected annual revenue growth of BMC will be an additional Rs 50 crore from holding tax, over the Rs 100 crore it usually earns from the component. After the new rule, in the current financial year, the civic body is expected to gain around Rs 10 crore, as five months have passed, BMC officials said.
“There is a five-fold rate for levying holding tax on areas under Idco. If the industrial units are non-manufacturing ones, then a concessional rate of one-third of the actual commercial tax tariff will be collected. But if hotels, malls, schools, colleges and hospitals are set up on Idco lands, full commercial rates will be applicable. Similarly, unused and encroached holdings will also attract full commercial rates while assessing the tax,” read the govt notification.
“The civic body was not empowered to collect holding tax from such establishments earlier but can now do so. Buildings on Idco-allotted lands will also get basic facilities like drains, roads and street lights. The move will help us increase our tax revenue,” said BMC commissioner Chanchal Rana.
Official sources said the BMC is losing at least Rs 50 crore every year as it was not able to collect tax from buildings set up on Idco lands. If it manages to collect even 50% of the assessed amount, its holding tax revenue is likely to cross Rs 150 crore, officials said.
There are thousands of buildings in the three industrial clusters — Chandaka, Mancheswar and Bharatpur. There are reputed educational institutes and other facilities too in the three clusters. In the future, BMC may enumerate the Idco buildings to prepare a database of total holdings in the city.
BMC calculates holding tax on the basis of 0.5% of the land value of a particular area (varies from locality to locality) and adds up the building cost, which is calculated on the basis of Rs 1.35 paise per sq ft of built-up area. Since govt land valuation has increased manifold at different locations in the city, the final amount went up in the revised tax assessment, which the Orissa high court halted in 2021. Since then, holding tax is collected on the basis of old rates.
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