‘Commercial tax on Discom not possible’
20 Oct 2012 8:25 AM IST
BJP ruled civic bodies are hell bent on imposing property tax on power distributing to companies on commercial rate and are putting immense pressure on executive wing to bring such a legislation, which is legally impossible task.
The officers are, however, keeping mum on the issue to avoid controvery, but revealed that as per the present issue, it is impossible for two reasons – they are service provider under Delhi Municipal Corporation [DMC] Act and secondly, Delhi government has 49 per cent stake in them and the properties belong to the Union government.
But East Delhi Municipal Coporation [EDMC] has already passed a resolution in the meetings of the Standing Committee and House, while North Delhi Municipal Corporation [NDMC] has passed in the meeting of the High Power Property Tax Committee. South Delhi Municipal Corporation [SDMC] councillors have also suggested it to the propoerty tax department for consideration. The Mayor of NDMC, in a recently concluded meeting of the house, agreed with the proposal and directed the officers to make an extensive list of such properties of the power distribution companies in its area.
‘According to the Article 265 of Constitution of India, not a single ruppee of tax can be covered with out appropriate law. The law of Delhi Municipal Corporation [DMC] Act states that the companies engaged in providing power generation and distributin are exempted from property tax and a ‘service tax in liew of property tax’ can be collected from them,’ said a senior officer of the department.
Millennium Post also learnt that BSES and BYPL challenged a property tax order of MCD in 2011 in Delhi High Court.
As per the MOU, these power distribution companies – BSES Yamuna, BSES Rajdhani, and NDPL – are just licensees of the these properties for the period they are distributing the power in the city and liable to pay liable taxes on them.
‘The transformers installed by Discoms on MCD lands are encroachments and civic bodies can’t impose tax on their own land. They can demolish the illegal structure and allot the land to the Discoms before demaing the ‘service tax in liew of property tax’ or enter in an agreement. They they issue notice it will be challegned in the court,’ said another senior officer of the property tax deparment.
The officers are, however, keeping mum on the issue to avoid controvery, but revealed that as per the present issue, it is impossible for two reasons – they are service provider under Delhi Municipal Corporation [DMC] Act and secondly, Delhi government has 49 per cent stake in them and the properties belong to the Union government.
But East Delhi Municipal Coporation [EDMC] has already passed a resolution in the meetings of the Standing Committee and House, while North Delhi Municipal Corporation [NDMC] has passed in the meeting of the High Power Property Tax Committee. South Delhi Municipal Corporation [SDMC] councillors have also suggested it to the propoerty tax department for consideration. The Mayor of NDMC, in a recently concluded meeting of the house, agreed with the proposal and directed the officers to make an extensive list of such properties of the power distribution companies in its area.
‘According to the Article 265 of Constitution of India, not a single ruppee of tax can be covered with out appropriate law. The law of Delhi Municipal Corporation [DMC] Act states that the companies engaged in providing power generation and distributin are exempted from property tax and a ‘service tax in liew of property tax’ can be collected from them,’ said a senior officer of the department.
Millennium Post also learnt that BSES and BYPL challenged a property tax order of MCD in 2011 in Delhi High Court.
As per the MOU, these power distribution companies – BSES Yamuna, BSES Rajdhani, and NDPL – are just licensees of the these properties for the period they are distributing the power in the city and liable to pay liable taxes on them.
‘The transformers installed by Discoms on MCD lands are encroachments and civic bodies can’t impose tax on their own land. They can demolish the illegal structure and allot the land to the Discoms before demaing the ‘service tax in liew of property tax’ or enter in an agreement. They they issue notice it will be challegned in the court,’ said another senior officer of the property tax deparment.
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