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Nearly 200 IT units in Hinjewadi near Pune seek lower property taxes

The Hinjewadi hub is home to majors such as Wipro Technology and modern buildings such as the Ascendas IT Park. The demand for lower tax rates is the first admission by these companies that the pandemic and lockdown have deeply impacted business.

Written by Kavitha Iyer | Mumbai | Published: June 11, 2020 4:05:34 am
coronavirus in maharashtra, covid-19 in maharashtra, maharashtra property taxes, pune IT units, Hinjewadi hub property tax, pune it units property tax, indian express news The Hinjewadi IT Association contends that units in technology hubs located in municipal corporation areas are charged property tax at residential rates as per this policy (File)

HIT hard by the Covid-19 pandemic and the lockdown, the nearly 200 infotech units in Hinjewadi, one of Maharashtra’s biggest technology hubs located near Pune, have sought to be charged lower property taxes. Stressing that they are not seeking new sops but are instead asking for implementation of a previous decision, they have urged the Maharashtra government to charge them property taxes at residential rates, as per the Information Technology/IT Enabled Services policy of the Maharashtra government that has been in place since 2015.

The Hinjewadi IT Association contends that units in technology hubs located in municipal corporation areas are charged property tax at residential rates as per this policy, but those located in the jurisdiction of village gram panchayats, including the Rajiv Gandhi Infotech Park, loosely called the Hinjewadi IT hub, continue to pay property taxes calculated at rates for industrial units, approximately 20 per cent higher.

The Hinjewadi hub is home to majors such as Wipro Technology and modern buildings such as the Ascendas IT Park. The demand for lower tax rates is the first admission by these companies that the pandemic and lockdown have deeply impacted business.

“Covid-19 has impacted IT companies too, orders are down, billing rates are down, everybody is asking for discounts. And let us reiterate that we are not asking for any fresh sops,” said Capt Kedar Paranjpye, Chief Administrative Officer of Persistent, a global IT solutions company with offices in Hinjewadi.

The IT units have also pointed out that while the gram panchayats collect property tax, they do not provide essential services. In fact, the Rajiv Gandhi Infotech Park falls in the jurisdiction of three village gram panchayats — Hinjewadi, Maan and Marunji. Much of the civic facilities inside the infotech park including garbage collection and water supply, however, are operated by the Maharashtra Industrial Development Corporation, or the Pune Municipal Corporation or the Pimpri-Chinchwad Municipal Corporation. “The rules permit the gram panchayats to raise tax rates periodically, and rates are increased to the maximum permissible limit,” Paranjpye said, adding that companies in Hinjewadi find the raised rates to be without any justification and that they prefer to pay taxes to the MIDC.

The largest area of the Rajiv Gandhi Park is located in Maan gram panchayat, followed by Hinjewadi.

Pune zilla parishad CEO Ayush Prasad has now written to the state government apprising them of the companies’ demand. Citing the example of a large complex housing IT units in Maan, the letter says its tax burden would be lower by nearly Rs 50 lakh annually, or nearly 60 per cent, if property tax is calculated at residential rates.

Expectedly, the gram panchayats are vehemently opposed to the move, already struggling to build and operate urban infrastructure in peri-urban areas such as Hinjewadi. “While accepting their demand could be a positive message of support for IT companies, and could boost jobs in the IT sector in this area, there will be on the other hand a dent to gram panchayat tax collections, and consequently to development works undertaken by gram panchayats,” Prasad told The Indian Express. “I do not have a personal opinion in the matter — I have merely brought the situation to the notice of the state government.”

There are very large numbers of industrial units including IT/ITES units in urbanised or newly urbanising areas in Pune district, including in the talukas of Mulshi, Haveli and Maval. According to a Maharashtra government decision dating back to September 2019, taxes from industrial areas in village limits would be collected by the MIDC on behalf of the gram panchayats and 50 per cent of the collections shared with them. Earlier this month, the Pune ZP already ruled that tax collection from units in industrial parks located within gram panchayat limits would henceforth be undertaken by the MIDC on behalf of the gram panchayats.

MIDC Joint CEO Abhishek Krishna said the matter has been forwarded to the state government’s Rural Development department by the zilla parishad because a decision to alter the property tax regime in gram panchayats would require an amendment to the Gram Panchayat Taxes and Fees Rules, 1960. “If we are asked, we would certainly recommend that IT units in gram panchayat areas be charged property tax as per the IT/ITES policy,” Krishna told The Indian Express.

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