Rate Cut: Maharashtra Govt Will Abolish Hiked Service Tax on MHADA-cessed Buildings, Announces Fadnavis

Maharashtra deputy chief minister Devendra Fadnavis announced in the assembly on Wednesday that the increased monthly service tax of Rs 665.50 levied on MHADA’s cessed buildings will be abolished and instead they will be levied the existing Rs 250 only.

Fadnavis announced this decision in response to a question raised by Bharatiya Janata Party leader Ashish Shelar in the assembly during a question and answer session. He further informed that since these buildings are unsafe, their redevelopment plan will be implemented soon.

In this regard, it has been stated in the reply that notices to honour their dues have been issued to 483 stall owners from Girgaon, Worli, and Lower Parel areas. Expenditure on the repair of cessed buildings, property tax, water tax, and shared electricity charges and other expenses amount to Rs 2,000 per stall per month. Till March 2019, service tax of Rs 250 per month was being charged. From April 2019, this was increased to Rs 500 per month, a 10 per cent jump every year. Accordingly, the current service tax chargeable to every stall owner is Rs 665.50 per month. This service tax is less compared to the monthly expenditure per stall. Also, a temporary stay has been given with regard to levying the revised service tax or issuing notices.

In Mumbai, property tax was waived for houses up to 500 square feet and no property tax is charged for houses from the slums. Also, the dwellers are given houses under the redevelopment scheme. Then why is this tax levied on cessed buildings of MHADA, said Shelar. He requested that either the tax be waived or charged at a nominal rate.

Nearly 20,000 families from Girgaon, Worli, and Lower Parel areas in Mumbai were issued notices by MHADA to pay the arrears of house rent, the fine payable along with the tax totalling Rs 70,000 to Rs 80,000, or vacate their houses. Since these 20,000 families residing in MHADA buildings are from the poor and the middle classes, they say that they cannot afford to pay these dues. In this regard, a starred question was raised in the legislative assembly regarding what action was taken by the government after investigating the matter and whether a suitable solution was arrived at with regard to giving discounts to these families in the increased tax and rent arrears and whether the government will collect rent at a fair price from them.

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