GREATER CHENNAI CORPORATION - REVENUE DEPARTMENT - Notification for Implementation of General Revision of Property Tax in Limits of Greater Chennai Corporation with Effect from Current Half Year (i.e. I/2022-23)

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No. 218] CHENNAI, MONDAY, APRIL 11, 2022 Panguni 28, Pilava, Thiruvalluvar Aandu-2053

Part III—Section 2

Statutory Notifications and Orders issued by Heads of Departments.

NOTIFICATIONS BY HEADS OF DEPARTMENTS, ETC.

GREATER CHENNAI CORPORATION

REVENUE DEPARTMENT

NOTIFICATION FOR IMPLEMENTATION OF GENERAL REVISION OF PROPERTY TAX IN LIMITS OF GREATER CHENNAI CORPORATION WITH EFFECT FROM CURRENT HALF YEAR (i.e. I/2022-23)

(R.D.C.No.G1/6743/2008, dated 11.04.2022)

No. SRO C-11(a)/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 fl oor 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 fl oor 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 2.0 and Atal Mission for Rejuvenation and Urban Transformation 2.0;

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 Corporation 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;

AND WHEREAS the Committee in its report has stated that considering the last revision of property tax carried out in 1998 and 2008 for Chennai core city and rest of the Tamil Nadu respectively the following market indices provide a good proxy for property valuation increase over time in order to ascertain the quantum of increase in the property tax that can be effected.

[ 1 ]

III-2 Ex. (218)2 TAMIL NADU GOVERNMENT GAZETTE EXTRAORDINARY (a) Wholesale Price Index – The Wholesale Price Index (WPI) is an indicator of infl ation 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 infl ation linked increase for Chennai city (except added areas) can be 2.97 times and 1.79 times for rest of the State.

(b) Cost Infl ation Index of Income Tax Department: The Change in Notional Value of Capital assets due to infl ation 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 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 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 has declined drastically during the period, while the revenue expenditure has increased manifold putting the municipal fi nances under severe strain;

AND WHEREAS, considering the fi nancial needs of the Urban Local Bodies to provide civic infrastructure and basic amenities/ services to the citizens, the mandatory conditions specifi ed by the 15th Central Finance Commission for availing the grant and the entry level conditions for receiving funds under various Central schemes and also the report of the aforesaid Committee, the Government have decided to accept the report of the Committee Vide G.O.(Ms)No.53, Municipal Administration and Water Supply (MA.IV) Department, dated 30.03.2022 and has advised that the General Revision of Property Tax in all the Municipal Corporations including Greater Chennai Corporation, may be taken up by the respective Councils as per the laws governing the relevant Municipal Corporations.

AND WHEREAS, as per Chennai City Municipal Corporation Act, 1919, Schedule –IV, Taxation Rules, Part 1-A. Rule 3(3), "the Commissioner shall assess the property tax having regard to, the property tax payable by the owner or the occupier with reference to the guidelines, if any, issued by the council".

AND WHEREAS, as per Section 98-A of Chennai City Municipal Corporation Act, 1919, "(1) Before the council passes any resolution imposing a tax or duty for the fi rst time, it shall direct the commissioner to publish a notice in the Offi cial Gazette and in the local newspaper of its intention and fi x a reasonable period not being less than one month from the date of publication of such notice in the Offi cial Gazette for submission of objections. The council may, after considering the objections, if any, received within the period specifi ed, determine by resolution to levy the tax or duty. Such resolution shall specify the rate at which, the date from which and the period of levy, if any, for which such tax or duty shall be levied.

(2) when the council shall have determined to levy any tax or duty for the fi rst time or at a new rate, the commissioner shall forthwith publish a notice in the manner laid down in sub-section (1) specifying the date from which, the rate at which and the period of levy, if any, for which such tax or duty shall be levied"

AND WHEREAS, the Council of Greater Chennai Corporation has resolved to notify General Revision of Property Tax under section 98-A of Chennai City Municipal Corporation Act, 1919, as per recommendation of the Committee and G.O.(Ms) No.53, Municipal Administration and Water Supply (MA.IV) Department, dated 30.03.2022 vide Resolution No. 39/2022, dated 09.04.2022.

NOW, THEREFORE, in exercise of the powers conferred under 98-A of the Chennai City Municipal Corporation Act, 1919, the Commissioner Greater Chennai Corporation notifi es the following provisions with respect to General Revision of Property Tax in Chennai City:

General Revision will be carried out with effect from current half year of this fi nancial year (i.e.1/2022-23) by multiplying the applicable 'Increase Factor' furnished in the table below with the existing Basic Street Rate respectively for each category.

Special Type buildings

For Special Type buildings (Star Hotels and Lodging Houses, Kalyana Mandapams, Cinema Theaters and Hospitals), the current methodology is based on the daily rentals of Hotels, Kalyana Mandapams and Hospitals and ticket rates of Cinema Theaters. In order to avoid administrative complexity in such a methodology, unnecessary litigation and also based on several representations from the concerned associations, the methodology of assessment for special category building in Chennai shall be made same as non-residential category (i.e. based on area and the non residential Basic Street Rate of the locality). And the Basic street rates applicable to non residential category shall be applied as such to Special Category properties in Chennai.

For assessees in this category who have cleared all arrears till 2/2021-22, the new methodology and rates shall be applied from the current half- year(i.e.1/2022-23). For assessees in this category having unpaid property tax dues, the new methodology and rates shall be applied from fi rst half-year of 2022-23 (i.e.1/2022-23), only after all dues have been settled by the concerned assessees upto 2/2021-22.

Vacant Land Tax:

Currently, vacant land tax assessment is being assessed as per the Council Resolution No. 405/2009 dated 29-10-2009. Most of the assessments are at Rs. 0.50 per sq. ft. The vacant land tax shall now stand at Rs.1.00 per sq. ft. Further, if two-third or more of the land is vacant, vacant land tax on such vacant land shall also be levied along with the property tax.

Private Educational Institutions including Self Finance Courses/ Departments in Government aided institutions:

The basic street rate for this category of properties shall be calculated at 1.6 times of the existing residential basic street rate (i.e., the pre-revision residential basic street rate). On this, an increase factor of 2 in the case of Chennai core city and 1.75 in the case of added area shall be applied as per the table above to arrive at the revised basic street rate of this category of properties.

Age rebate shall be applied as follows:

For the purpose of Age Rebate the date of assessment/re-assessment, whichever is later shall be taken as the crucial date, to decide the quantum of Age Rebate.

Provided that, in case of re-assessment, if the date of effect of re-assessment is from the date prior to the re-assessment, date of effect shall be used for deciding the quantum age of rebate.

The quantum of age rebate shall be as follows:

Floor Rates

The existing rate of property tax i.e.12.40 percent of annual value per- half year shall be the fl oor rate of property tax in Chennai City.

Automatic Revision

Each year, the Basic Street Rate in force shall be increased by 6 percent or simple average of the growth rate of State's GSDP for the past 5 years, whichever is higher. (The effect of this annual increase shall be applicable from 1st April of each year and will be applied to all properties, existing and new)

Subsequent to the implementation of general revision as envisaged herein, all new/modifi cations/revised property tax assessment will be carried out as per the new BSR (i.e. Existing BSR x increased factor of the respective category) with effect from 1st half year of 2022-23.

This notifi cation is published as per Section 98-A of Chennai City Municipal Corporation Act 1919. Any objections may be addressed to the Principal Secretary/Commissioner, Greater Chennai Corporation, Ripon Buildings, Chennai – 600 003 within 30 days from the date of publication of the notifi cation. After 30 days from the date of this notifi cation, the Council shall decide and fi nalize on the provisions contained herein.

Chennai-600 003, 11th April 2022.

GAGANDEEP SINGH BEDI, Principal Secretary / Commissioner, Greater Chennai Corporation.

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