East corp will ask Metro to pay property tax

Unlike north and south corporations, we are running under a severe cash crunch and thus we need to take decisions to increase our revenue. We have already apprised the DMRC about the decision,

EDMC OFFICIAL,

NEWDELHI: Adding to Delhi Metro Rail Corporation’s ( DMRC) financial burden, the East Delhi Municipal Corporation (EDMC) has decided to do away with the service charge ‘rebate’ it gives to the metro rail every year.

The DMRC might have to shell out a few hundred crores as the EDMC will now charge the metro rail ‘property tax’, which is much more than the ‘service charge’ that it currently charges.

During the standing committee meeting on Thursday, the civic agency passed a resolution nullifying the rebates given to the DMRC since 2011.

According to officials, DMRC is not the ‘Centre’s property’ and thus no rebate will be allowed in any form to the agency.

Asked about EDMC’S move, DMRC’S spokesperson did not confirm having received any communication regarding the move.

“DMRC is running into losses and has a huge loan to pay to the Japan International Co-operation Agency,” a DMRC source said.

As per the Delhi Municipal Corporation Act, the civic agency charges service charge from the Centre’s properties instead of property tax.

“But DMRC is now a corporate body, running commercial activi- ties within its premises and making a lot of revenue as well. So it won’t be justified to give them any rebate in the form of service charges. In fact we are planning to charge 100% property tax from them in the future,” said senior EDMC official.

In 2011, the unified municipal corporation had passed a resolution to take ‘service charge’ from DMRC in three categories.

In the proposal, the DMRC properties were divided into essential, commercial-1 and commercial-2 categories. The municipal corporation had agreed to charge 5% service tax on essential properties of DMRC such as railway lines, yards and workshop.

On commercial activities, including malls, 50% tax would be charged and in commercial-2, which would include commercial activities on a big scale, 75% would be charged.

“But the proposal passed in June 2011 doesn’t match with the MCD’S property tax norms. So we have decided to withdraw them all. The proposal received approval in the standing committee and now it will be placed before the house for final approval,” said the official.

According to the official, the decision was taken after consulting the EDMC’S counsel.

“Unlike north and south corporations, we are running under a severe cash crunch and thus we need to take decisions to increase our revenue. We have already apprised the DMRC about the decision,” said the official.