Mumbaikars will have to brace for taxing times ahead as the Brihanmumbai Municipal Corporation (BMC) is preparing a proposal to charge a “fire cess” for new residential and commercial structures in the city. According to officials, the cess will vary between Rs 5 to Rs 12 per square metre depending on the area, height and type of the building.
The idea of charging a cess for essential services such as fire, waste collection and transport was presented by municipal commissioner Sitaram Kunte in his budget speech for theyear 2015-16.
Senior officials confirmed that the proposal will be presented to the corporation for an approval following which it will be sent to the state government for final approval.
A senior fire department official said, “The fee will be charged when developers seek a fire approval from BMC. The occupation certificate will be handed over only after the one-time payment is made.”
The official also said that they are working on the modalities for levying the cess on existing structures in the city too. While residential buildings will pay the lowest rates as per the schedule, commercial structures will be charged more, the official confirmed. Dilapidated structures will also face the brunt of increased charges, the official said.
The cess for existing structures is likely to be added to the property tax bracket which in turn is set to increase by 40 per cent on an average this year.
Municipal Commissioner Sitaram Kunte had revealed the BMC’s plans of charging a cess on many of its services from the next financial year 2016-17 since its primary revenue earner octroi is likely to be phased out soon. Of the estimated total revenue income of Rs 23,509.10 crore for 2015-16, the revenue from octroi is estimated to be the highest at Rs 7,900 crore.
The BMC’s search for alternative sources of income is the direct fall-out of the looming GST, which is set to replace all indirect taxes, including octroi. This will lead to a loss of about Rs 15,000 crore for the civic body.