The Municipal Valuation Committee took stock
of the terms of reference assigned to it vide Government Order dated 28.10.2003
requiring it to make recommendations on the matters relating to classification
of vacant lands and buildings and fixation of base unit values and
determination of factors for varying the same and to consider objections
thereto. In this connection, the Committee also took note of the
recommendations on the subject made by the Expert Committee headed by Mr. K.
Dharmarajan, I.A.S., appointed by the Government on the introduction of Unit
Area Method in MCD and the initiatives taken by the Corporation pending appointment
of the Municipal Valuation Committee, in inviting comments on the
classification of colonies, base unit values and factors vide public notice
dated 02.10.2003. Looking to the
constraints of time and the detailed work already carried out by the erstwhile
Expert Committee, the Municipal Valuation Committee decided to tentatively
proceed on the basis of the recommendations of the Expert Committee on
classification of colonies/ areas/ localities, base unit area values and
factors for increasing or decreasing the base unit area value.
A public notice was accordingly issued by
the Committee on 30.10.2003 inviting representations/ suggestions/ comments on
the classification of colonies, base unit area values and factors published by
the Corporation on 02.10.2003. The
notice was also posted on the web site of the Municipal Corporation of Delhi
www.mcdonline.gov.in for wider publicity.
It was noted by the Committee that about 600 representations had already
been received against the public notice issued on 02.10.2003. It was decided by the Committee to consider
all representations received even after the notified deadline of 30 days from
the issue of the public notice on 02.10.2003.
With a view to fully understanding the
perspectives of different citizen groups, the Committee embarked on a very
extensive consultative process. The
Committee held a number of public hearings in which the citizens, interest
groups, RWA’s, trade & industry associations presented their submissions
before the Committee. The Committee also held consultations with Delhi Factory
Owners Association, Delhi Voluntary Hospitals Forum and Hotel & Restaurant
Association of Northern India. The Committee heard/received representations
from about 350 resident welfare associations & groups.
The Committee considered the minutes of the
House Committee, which deliberated on Property Tax on 3rd October
2003 in the Old Secretariat under the Chairmanship of Dr. Narender Nath Hon’ble
Member of Legislative Assembly, on introduction of Unit Area Method in Delhi
and took into account the concerns expressed by them. The Committee also considered the points emerging from the
decisions taken by the Council of Ministers conveyed vide Principal Secretary
Urban Development Govt. of NCT of Delhi D. O. No. F-7(367)(2)/2002/UD/249 dated
23.10.2003.
A number of representations, which were made
to Committee relating to specific classification of colonies/areas/localities,
were physically got inspected through a team of experts and the facts verified
through field inspections. The
representations received by the Committee for inclusion of certain colonies
which were left out in the earlier classification notified in the newspapers
were also forwarded to the Chief Town Planner for inspection and to report on
their status. The category-wise
break-up of the representations received is given in Table 1. The summary of
the changes made in the classification of colonies/ areas/ localities is given
in Table 2. The Committee also
requisitioned basic data about different kinds of use of properties in
colonies/ areas/ localities from the office of the Assessor & Collector
(MCD) such as covered area, current demand and previous year’s collections,
details of farm houses, industrial areas, schools, hospitals, nursing homes
etc.
|
Category |
Submissions |
|
A |
131 |
|
B |
437 |
|
C |
338 |
|
D |
65 |
|
E |
38 |
|
F |
33 |
|
G |
39 |
|
Rural Villages |
20 |
|
Total |
1101 |
|
Category |
Count |
Downgraded Count |
Upgraded Count |
|
B |
25 |
24 |
1 |
|
C |
10 |
10 |
|
|
D |
8 |
1 |
7 |
|
E |
19 |
|
19 |
|
F |
8 |
|
8 |
|
G |
72 |
|
72 |
The Committee decided that all
representations received be segregated zone-wise and zone-wise maps giving
present classification indicating the categories in a colour scheme be got
prepared and the colonies from where representations had been received marked
on these maps. It was also decided that
certain colonies, wherein a large number of representations were received
during the public hearings and where there is a prima-facie need for an inspection
based on the facts given in the representation and their location and
surroundings in the zone-wise map be referred to the inspection teams
constituted by the Chief Town Planner and their inspection reports be obtained
for consideration of the Committee. The
Committee also considered the previous year’s revenue collections and the
targets set for the coming financial year 2004-05 by the MCD vide contents of
the speech of Commissioner delivered before Standing Committee (MCD) on 3rd
December 2003. Keeping in view, the anticipated revenue projections of Rs.
1245.6 crores for the year 2004-05 and proposed tax rate of 10%, the Committee
has attempted to estimate the unit area value of different categories and
propose multiplicative factors for structure, age, occupancy and use.
RECOMMENDATIONS
ON UNIT AREA VALUES
The Committee took note of the classification of colonies/areas/localities into seven categories from ‘A’ to ‘G’ and it was resolved that the base unit area value would be for category ‘D’ since this is the median for the category-wise covered area. Multiplying factors of greater than 1.0 would be used for those above ‘D’ and less than 1.0 for the categories below ‘D’. It was also decided that with a view to balancing the needs for equity and revenue, the model with 25% (+) for higher categories & 15% (-) for lower categories over the base rate with unit base value of Rs. 320 per square metre (rounded off to the nearest multiple of ten) as recommended in the Report of the Expert Committee would be reasonable. The recommended unit area values for categories A to H, H being the new category proposed by the Committee for rural villages (rounded off to the nearest multiple of ten), are given in Table 3.
|
Category |
Unit Area Value (in Rs. per sq. metre) |
|
A |
630 |
|
B |
510 |
|
C |
410 |
|
D |
320 |
|
E |
250 |
|
F |
220 |
|
G |
190 |
|
H |
100 |
RECOMMENDATIONS ON CLASSIFICATION
1. The Committee considered all representations and submissions made in the public hearings regarding classification of the colonies/areas/localities and inclusion of certain colonies in categories ‘A’ to ‘G’ taking into account the parameters for classification of vacant land and buildings into colonies/groups as laid down under section 116A of the Act viz:-
(a)
settlement
pattern such as plotted housing, group housing, colony with flats only, urban
village, unauthorized colony, resettlement colony, rural village and
non-residential areas;
(b)
availability
of civic and social infrastructure;
(c)
access of
roads;
(d)
access to district
centres, local shopping centres, convenience shopping centres, and other
markets;
(e)
land prices as
may, from time to time, be notified by the Central Government or the Delhi
Development Authority;
(f)
use-wise
category of any building including residential building, business building,
mercantile building, building for recreation and sports purposes, industrial
building, hazardous building and public purpose building including educational,
medical and such other institutional building and farmhouse, as may be
specified by the Corporation;
(g)
in the case of
buildings used for business, mercantile, recreation and sports, industrial,
hazardous, storage or farmhouse purposes, the location of such buildings
adjacent to such categories of streets, as may, subject to the provisions of
sub-section (2), be specified by the Corporation;
(h)
the types of
buildings which may be classified as pucca, semi-pucca or katcha, as may be
specified by the Corporation;
(i)
the age-wise
grouping of buildings as may be specified by the Corporation; and
(j)
such other
parameters as may be considered relevant by the Municipal Valuation Committee.
The Committee has attempted to rationalize the published classification given various constraints. In order to further streamline the classification the Committee has considered additional parameters of prevailing rental values, economic profile of the occupants and geographical location of the colony/area/locality. The recommended classification of 1935 colonies including an addition of 6 new colonies has been placed on the website of the Committee.
|
Category |
Colonies |
|
A |
46 |
|
B |
73 |
|
C |
189 |
|
D |
183 |
|
E |
192 |
|
F |
494 |
|
G |
758 |
|
Total |
1935 |
2. The Committee recommends that rural villages be placed in a separate category “H” with a Unit Area value of Rs. 100 per sq. mtr. The urban villages would continue to be categorized at two categories below the highest neighbouring colony.
3. It was resolved that it be recommended that in case any colony is left out or certain new colonies come up in the interim period between the constitution of two MVCs, a sub-committee consisting of the Chief Town Planner, A&C Deptt. and the Building Deptt. would inspect the same and give a report based on the principles of classification laid down by the Municipal Valuation Committee for consideration of the Commissioner, whose decision will be final.
4. Farmhouses -
The Committee recommends that farmhouses should be categorised on the basis of
the neighbouring localities in the area they are located and all farmhouses may
not be included in category A as has been published in the notice dated
02.10.2003. The classification of
farmhouse would accordingly be the same as the classification of the highest neighbouring
residential colony in the area.
RECOMMENDATIONS
ON FACTORS
1.
The Committee
feels that a factor for tenanted properties is essential in order to lower the
onus on self-occupied properties. The Committee however reconsidered the range
of occupancy factor, which is presently from 2 to 3.5 and recommends a uniform
factor of two in all categories. In case of tenanted properties being used for
non-residential purposes, the occupancy factor would not be applicable and
non-residential use factor would apply.
2.
The Committee
resolved to adopt the census classification of the structures, characteristics
of the buildings i.e. katcha, semi-pucca or pucca with factors of 0.5 for
katcha structures, 1.0 for semi-pucca & pucca structures.
3.
The Committee
after going through the representations and submissions made in the public
hearings recommends the following multiplicative factors for the purpose of
rebate on age of property:
· Post 2000 properties: 1
· 1980-99: 0.9
· 1960-79: 0.8
· Prior to 1960: 0.6
4.
The Committee
recommends that the number of non-residential use categories should be kept to
the minimum and be reduced from the proposed 10 categories to about 5
categories with the use factor as mentioned against each as under:
· Public purpose (Government offices in self use, recommended educational and medical institutions etc.) - 1
· Utilities (Electric, telephone excluding towers, recreational facilities) - 2
· Industry - 3
· Business (Office/Banks/Shops/hotels/restaurants other than Star hotels etc.) -4
· Star Hotels/Towers & hoardings –5
5.
The Committed
resolved that in order to have the minimum complications in working out the tax
liability, the street factor of the location of the buildings may not be taken
into consideration in the current phase of implementation of the system.
6.
It was
resolved by the Committee that the definition of Towers/Hoardings is to be
incorporated in the bye-laws in order to enable the Deptt. to realise the tax
revenue from them, in view of the note from Addl. Commr. (Revenue) MCD
forwarded to the Committee. It was
further decided that the covered area in such cases could be calculated based
on the height and extremities of the foundation in case of Towers and the
square of the extremities of the poles on which the Hoarding is erected, in
case of Hoardings. It was further
decided to place the highest factor on both these categories and also proposed
that the Corporation may fix a higher tax rate for such structures.
7.
The
representation given by the Delhi Factory Owners Association was considered and
it was decided to call them for a hearing.
The Committee took into account the submission made by the Association
on the deficient infrastructural services and also the contribution of the
industrial sector towards employment generation & state income. It was
resolved that there is a need to make a distinction between the space used for
manufacturing activity, space used for office and the area used for other
activities such as business use/ showrooms/ warehousing. The Committee resolved
to lower the categorisation of industrial areas by one category than the
published classification of the industrial area, minimum being G. The Committee also resolved to lower the
industrial factor from 6 to 3 in order to ensure that there is no drastic
increase in tax from the prevalent levels. However the space used for office
and the area used for other activities such as business use/ showrooms/
warehousing would attract the applicable multiplicative factor for such uses.
8. The Committee heard the representatives of Delhi Voluntary Hospitals Forum who informed that they constitute member hospitals registered under the Societies Registration Act and are non-profit organizations. The representatives stated that the factor of 5, as applicable to other private or corporate hospitals, should not be made applicable to them. The Committee deliberated the issue since similar requests had also been received from educational/other non-governmental institutions. The Committee is of the view that hospitals/educational institutions could be classified as follows:
·
Hospitals/Educational
Institutions charging no fee
·
Hospitals/Educational
Institutions charging nominal fee/ fee lower than notified by the Corporation
·
Hospitals/Educational
Institutions charging fees at commercial rates but registered as non-profit
societies/institutions
·
Corporate
Hospitals/Educational Institutions
The Municipal Valuation Committee is not in
a position to go into each individual case and would, therefore, recommend a
simple principle. The Corporation
should determine the level of free/ voluntary/ charitable service in
educational and medical service by setting up a Committee. This Committee could determine the level of
fees charged in educational institutions, which would qualify for a factor of 1
or 2 or any applicable factor for levy of property tax.
Similarly in the case of medical services an expert committee could
determine which type of institutions/organisations may be charged property tax
on a factor of 1 or 2 or any factor applicable. These norms
should be transparent. The principle
could be the level of free service provided by these institutions.
9. The Committee also heard the representatives of Hotel & Restaurant Association of Northern India who stated that hotels have huge public areas viz. lobby etc. and also a big service area such as kitchen/laundry facilities etc. and the tax under the new system should be restricted to the covered area being occupied by the rooms which are available for letting out. The representatives also stated that the amount of tax payable by hotels, especially the star hotels, which have a factor of 10 under the proposed new system, would be beyond their capability to pay and make them internationally uncompetitive as also uncompetitive to hotels in NDMC area within Delhi itself. The Committee having regard to the submissions of the association recommends a multiplicative factor of 5 instead of the proposed factor of 10 in case of star hotels. The Committee recommends that for the purposes of Star Hotels these would mean to include 3 Star hotels or above as defined by the Hotel Classification Committee of the Ministry of Tourism, Govt. of India.
GENERAL
RECOMMENDATIONS
1. Committee also recommends that for the properties built on plot measuring 100 sq. mtrs. or below, the plot area could be considered as the basis for measuring of covered area and the tax be calculated according to the number of floors in the property. The Committee also recommends that there should be no requirement of certification from the licensed Architect in such properties. The ground coverage in such cases should be decided by the Corporation and notified for easy calculation of property tax. Only if any person challenges the notification, would an inspection be considered necessary by an architect as per rules.
2. In order to compensate for any shortfall of revenue due to rationalisation of the factors the Committee suggests that the commercial properties in residential areas may be taxed at a differential rate.
3. The Committee does not recommend imposition of a vacant land tax in the present phase of implementation. However the Corporation may take up this issue later.
4. The Committee recommends a residual clause empowering the Commissioner MCD to exercise any power vested in the Municipal Valuation Committee to take any decision, the necessity for which may arise subsequent to the completion of term of the Committee keeping in view the basic principles upon which the recommendations of the Committee have been based.
5. The Municipal Valuation Committee recommends the immediate setting up of the Municipal Taxation Tribunal and the Hardship Committee for smooth implementation of the unit area taxation system in the transition period.