BENGALURU: The Bruhat Bengaluru Mahanagara Palike (BBMP) has planned to raise service charges for government buildings, educational institutions and others which avail tax exemptions, in the city.
Taxes are the main source of revenue for the BBMP and it has now has planned to increase the service charge for building owners who have been availing tax exemptions from many years. Government buildings and educational institutions are eligible for tax concessions.
Property tax concessions are given to properties of educational institutions providing social services, including government buildings and private educational institutions. Earlier, the building owners got a 75 per cent of tax concession. The Palike had planned to recover 100 per cent tax from them, but it was unsuccessful.
Hence, it has now planned to increase the service tax to 50 per cent. There are more than 50,000 tax-exempt buildings in the city. The BBMP revenue department has conducted meetings and discussed the issue. If the new system is implemented, the civic body can raise an additional Rs 3,000 core.
“The target for this year’s tax collection was Rs 4,200 crore and so far, we have collected Rs 2,900 crore, which is Rs 200 crore more than last year. We are making achieve the government’s and the BBMP’s budget target. Under the BBMP Act, service tax for educational institutions was 25 per cent, but it was changed to 100 per cent. Many institutions went to court and some tried to pay 25 per cent as taxes while others did not pay at all. We have come up with a proposal to bring back the old system”, said BBMP Special Commissioner Ravindra.