MUNICIPAL ADMINISTRATION AND WATER SUPPLY DEPARTMENT - General Revision of Property Tax in all Municipalities and Town Panchayats Under the Tamil Nadu District Municipalities Act, 1920

No. 194] CHENNAI, WEDNESDAY, MARCH 30, 2022 Panguni 16, Pilava, Thiruvalluvar Aandu-2053

Part II—Section 2

Notifications or Orders of interest to a Section of the public

issued by Secretariat Departments.

NOTIFICATIONS BY GOVERNMENT

MUNICIPAL ADMINISTRATION AND WATER SUPPLY DEPARTMENT

GENERAL REVISION OF PROPERTY TAX IN ALL MUNICIPALITIES AND TOWN PANCHAYATS UNDER THE TAMIL NADU DISTRICT MUNICIPALITIES ACT, 1920

[G.O. Ms. No. 52, Municipal Administration and Water Supply (MA. IV) Department, 30th March 2022,

பங்குனி 16, பிலவ, திருவள்ளுவர் ஆண்டு--2053.]

No. II(2)/MAWS/205(b)/2022.

WHEREAS the 15th Central Finance Commission in its report has recommended that to qualify for any grants for urban local bodies from 2022-23 onwards, States will have to appropriately notify floor rates in the year 2021-22 and thereafter show consistent improvement in collection in tandem with the growth rate of the State's own GSDP;

AND WHEREAS the Government of India has mandated notifying the floor rates of property tax by the urban local bodies as one of the entry level conditions for receiving Central assistance under the Centrally sponsored schemes, viz. Swachh Bharat Mission 2.O and Atal Mission for Rejuvenation and Urban Transformation 2.O;

AND WHEREAS in G.O. (Ms) No.150, Municipal Administration and Water Supply Department, dated 12.11.2007, orders were earlier issued to the effect that the general revision of property tax in all the Municipal Corporations, Municipalities and Town Panchayats shall be taken up with effect from 01.04.2008, as per the existing statutory provisions in the relevant Urban Local Bodies' Acts and accordingly the revision of property tax was carried out in all Municipalities, Town Panchayats and Municipal Corporations except the Chennai City Municipal Corporation;

AND WHEREAS subsequently in G.O.(Ms) No.73, Municipal Administration and Water Supply Department, dated 19.07.2018 and G.O. (Ms) No.76, Municipal Administration and Water Supply Department, dated 26.07.2018, orders were issued for general revision of property tax in all Municipal Corporations, Municipalities and Town Panchayats, with effect from 01.04.2018, as per the existing statutory provisions in the relevant Urban Local Bodies' Acts;

AND WHEREAS in G.O.(Ms) No.150, Municipal Administration and Water Supply Department, dated 19.11.2019, orders were issued constituting a Committee to examine the issues related to general revision of property tax in all the Urban Local Bodies and also for withholding of the general revision of property tax ordered in the said G.O.(Ms) No.73 and G.O.(Ms) No.76, till the receipt of the report of the Committee and the decision of the Government thereon;

(a) Wholesale Price Index Method - The Wholesale Price index (WPI) is an indicator of inflation in the country. The WPI for 1998-99 is 48.1; for 2008-09 is 80 and for January 2022 is 142.9. The WPI has increased by 2.97 times from 1998- 99 to January 2022 and it has increased by 1.79 times from 2008-09 to January 2022. Thus, it is inferred that the inflation linked increase for Chennai city (except added areas) can be 2.97 times and 1.79 times for rest of the State.

(b) Cost Inflation Index of income Tax Department –The change in notional value of capital assets due to inflation over a period of time is prescribed by Income Tax department. The increase in the index from 1998-99 to 2021-22 is 3.8 times and from 2008-09 to 2021-22 it is 2.31 times.

(c) GDP growth method - The GSDP of the State at current prices for 2008-09 was Rs.4,17,272 crore. The GSDP for 2021-22 is estimated to be around Rs.21,79,655 crore. This shows a growth by a factor of around 5.2 times;

AND WHEREAS the above factors indicate the steady increase over a time in the economic indicators, and during this period, the property tax has remained the same and the share of own source revenue of urban local bodies have declined drastically during the period, whereas the revenue expenditure has increased manifold putting the municipal finances under severe strain;

AND WHEREAS considering the financial needs of the Urban Local Bodies to provide civic infrastructure and basic amenities/services to the citizens, the mandatory conditions specified by the 15th Central Finance Commission for availing grants and the entry level conditions for receiving funds under various Central schemes and also the report of the aforesaid Committee, the Government have decided that the general revision of property tax in all Municipalities and Town Panchayats may be taken up immediately;

NOW, THEREFORE, in exercise of the powers conferred by section 81-A of the Tamil Nadu District Municipalities Act, 1920 (Tamil Nadu Act V of 1920), the Governor of Tamil Nadu hereby directs all the councils of the Municipalities and Town Panchayats in the State to levy the property tax at the rates as indicated below, with effect from the 1st April 2022:-

(A) Residential Properties-

(B) Non-Residential Properties-

(C) Vacant Land Tax-

Vacant Land Tax to be increased by 100% in all urban local bodies.

(D) Floor Rates-

The Annual value of the property is calculated based on the Zonal Basic Values in the Municipalities and Town Panchayats. The Property Tax Rate as a percentage is applied on this Annual Value. The existing rates of Property Tax (i.e. % of Annual Value, which is levied as Tax) in each Municipalities and Town Panchayats may be notified as the Floor Rates of Property Tax.

SHIV DAS MEENA, Additional Chief Secretary to Government.