GHMC to levy new tax on city

Entertainment, professional and vehicle taxes may be revised

Telangana State Finance Commission (TSFC chairman Rajesham Goud on Wednesday recommended to the GHMC) to levy additional tax on all eateries, commercial establishments, sale of petrol, sale of motor vehicle and several others commercial transactional points in a bid to augment revenues of the civic body.

Chairman of the Telangana State Finance Commission (TSFC), Rajesham Goud, on Wednesday recommended to the Greater Hyderabad Municipal Corporation (GHMC) to levy additional tax on all eateries, commercial establishments, sale of petrol, sale of motor vehicle and several other commercial transactional points in a bid to augment revenues of the civic body.

The rationalisation for the imposition of a new tax, reportedly on the instruction of Chief Minister, K. Chandrashekar Rao, is to meet expenditure of ongoing civic projects. The new tax is likely to impact nearly 75 to 80 lakh people in Hyderabad.

Rajesham Goud recommended to the GHMC to collect a nominal amount but instead of calling it a tax, suggested a fancy name – ‘city development fund (CDF)’. Besides the CDF, Mr Goud also suggested to the civic corporation to levy taxes by calling them ‘city sanitation charges’ after studying similar models across other municipal corporations in the country.

He even asked authorities to consider revision of entertainment tax, professional tax and motor vehicle tax, besides bringing back the largely defunct octroi.

Sources said that his recommendations will directly take a toll on about 80 lakh residents living in the city. The GHMC has already been collecting about `200 crore from residential properties, `1,200 crore from non-residential properties and `56 crore through trade licenses.

When asked when the recommendations would be implemented, Bonthu Rammohan, city mayor, told Deccan Chronicle that the corporation will conduct an ‘extensive study’ prior to its implementation. He said that these were only recommendations and would have to first ascertain whether they could be implemented or not.

Directly contradicting the mayor, a senior GHMC official on condition of anonymity said that citing financial situation of the GHMC, the TSFC reconsiderations were being seriously taken into consideration. He revealed that the corporation authorities would soon meet the Chief Minister prior to levying these additional taxes and cesses.

The official hinted that the TRS government led by Mr Rao was in a dilemma whether to implement the new taxes before or after the civic body elections. It is now a matter of time, of when, rather than if these would be implemented, he said.

Rather than releasing funds to GHMC from state budget, the government was asking the corporation to levy additional charges on citizens, which would result in a public outrage.

The state finance commission recommended collecting a nominal amount, calling it the ‘city development fund.’

Besides the CDF, it also suggested levying ‘city sanitation charges.’