Bengaluru University to pay Rs 4 cr tax to BBMP

Bengaluru: After setting an ambitious target, property tax collection has fallen woefully short. The Bruhat Bengaluru Mahanagara Palike (BBMP) had collected only Rs 1,916 crore of tax till September 14th, 2020 as against around Rs 2,000 crore property tax collected during the same period last fiscal. It seems that the civic body failed to reach the target of property tax collection which is the main source of income. Reason for collecting less amount is because many property tax defaulters. It has learnt that Bengaluru University is one among them which has retained its service free and property tax of rupees 4 crore to BBMP.

According to reports, the civic agency has calculated that Bengaluru University owes service fee and property tax worth Rs 4,10 crores Meanwhile, BBMP claimed that its officials had issued a number of reminder notices to Bengaluru University. But the University has not responded to the single notice. BBMP officials claim that the balance of 4 crore does not include penal interest. If the tax payment is delayed, the BBMP will impose penal interest rates of 24 per cent per annum, up to 2 per cent per month. If the amount of the penalty interest is taken into consideration, the university will have to shell Rs 9 crore to the BBMP's account.

"We are collecting only a service fee from the building used for educational purposes in the Jnanabharathi (Bengaluru University) campus and property taxes are being collected on houses and other buildings in premises. So, it is learnt that from the beginning the University has not even paid a single tax to the Corporation. We have issued notice to pay the outstanding service charges on 1st September and also been told to pay the dues within 15 days of the date of notice. Despite the deadline, there is no response from the university" says BBMP senior official from the revenue wing.

However, BBMP does not charge property tax from educational institutions and government offices. Instead, they have to shell out 25 percent service charge of their total property tax amount as prescribed under Section 110 of the Karnataka Municipal Corporations (KMC) Act, 1976. In 2008, the city corporation was extended by including 110 villages and municipalities on the outskirts of the city. Since then, the Jnanabharathi campus of the University of Bangalore has been treated as BBMP limits. Since then, the university authorities have not paid property taxes or service fees.

Reacting on this, Bengaluru University, senior official says, "The issue had not come to my knowledge. As we are also a government run agency, we can pay the dues of the BBMP as soon as we receive the grants from the government. So, I will look into this issue by what the rules say so far and will solve this problem."