BHUBANESWAR: Under fire from smart city residents, the state government on Monday decided to suspend collection of holding tax at the revised rate till the Orissa high court comes up with its final judgment on the matter. Following the government decision, the Bhubaneswar Municipal Corporation (BMC) had to put on hold collection of holding tax dues as per the revised rates.
“A petition is in the high court opposing the move of the BMC to collect holding tax on the basis on new rates. The court had given an interim order to collect tax on the basis of revised rate, but in that case only 50% of total dues can be collected by the civic body. In view of people’s demand, now the new rate has been put on hold,” housing and urban development minister (H&UD) Pratap Jena said even as state Congress chief Niranjan Patnaik demanded a complete rollback.
The holding tax had gone up by 50-500% due on the basis of revised benchmark valuation of land in the state capital and not due to BMC increasing holding tax. Holding tax, a major revenue component of the civic body, is calculated on the basis of land value and building cost. The BMC said holding tax is 17.5% of the land value and the building cost taken together (in case of residential complex).
Given that the circle rate has increased manifold at different locations in the city, it has an impact on the holding tax. “The BMC has kept the holding tax intact. Its mandate is to assess (evaluate) the tax on the basis of the new benchmark value of land,” explained a BMC officer.