Increased service tax levied on cessed buildings will be abolished, announces DCM Fadnavis

Deputy chief minister Devendra Fadnavis announced that only Rs250 will be levied.

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Mumbai: Maharashtra Deputy Chief Minister Devendra Fadnavis announced in the Legislative 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 service tax of Rs 250 only.

Devendra Fadnavis announced this decision in response to a question raised by Bharatiya Janata Party (BJP) leader MLA Adv. Ashish Shelar. He further informed that since these buildings are unsafe, their redevelopment plan will be implemented soon.

In his reply the Deputy Chief minister stated that the notices to honour their dues have been issued to 483 stall owners from Girgaon, Worli and Lower Parel areas. Expenditure on repair of cessed buildings, property tax, water tax and shared electricity charge 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 percent increase every year. Accordingly, the current service tax chargeable to every stall owner is Rs 665.50 per month. This service tax is less as compared to the monthly expenditure per stall. Also, a temporary stay has been given with regard to levying the revised service tax or for issuing notices.

In Mumbai, property tax was waived off for houses up to 500 square feet and no property tax is charged to houses from the slums. Also, these dwellers are given houses under redevelopment. Then why is this tax levied on cessed buildings of MHADA, asked MLA Adv. Ashish Shelar. He further requested that either the tax must be waived off or it must be charged at a nominal rate. It was owing to this request that the deputy chief minister announced to waive off the increased tax.

Meanwhile, 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 else to vacate their houses. Since these 20,000 families residing in MHADA buildings are from the poor and the middle class, 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 said matter and whether a suitable solution was arrived at with regard to giving discount to the said families in the increased tax and rent arrears and whether the government will collect rent at a fair price from them.