New tax rates for PG homes may come into effect next fiscal
July, 30th 2014
The cash-strapped Bruhat Bangalore Mahanagara Palike (BBMP) may have to wait till the next fiscal to collect property tax at commercial rates from paying guest (PG) accommodations in the city.
This issue will be placed before the BBMP council on Wednesday. BBMP sources said the civic body could not implement the proposed new rates now (three months into this financial year). “Many owners of PG accommodations would have already paid property tax to the BBMP. Thus, we have proposed to levy it from April 1, 2015,” sources said. More than Rs. 60 crore is expected from this source alone.
The city has several PG accommodations that continue to pay property tax under residential rates under the SAS. Several councillors had maintained that PG accommodations and serviced apartments were making profits, while paying meagre tax to the BBMP. In November last year, the BBMP council had approved the decision to levy commercial rates on PG accommodations and serviced apartments that had more than 12-bed capacity. The council had also approved the move to classify them as tenanted accommodations.
Following this, the BBMP issued a notification on February 3, 2014 and invited objections from citizens. But the final notification was not issued as the poll code was in place ahead of the Lok Sabha elections.
Yediyur councillor N.R. Ramesh had claimed there were over 8,000 PG accommodations, while the BBMP’s revenue records showed only 272. He said the BBMP was collecting only Rs. 31.17 lakh a year from registered PG accommodations, and added if commercial rates were levied, the BBMP could collect more than Rs. 60 crore.