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The Hindu
The Hindu
National
The Hindu Bureau

Industrialists in Mysuru complain that property tax is hurting

Stakeholders in the industrial and manufacturing sectors in Mysuru have urged the Karnataka Government to reduce property tax on industrial sites to make the enterprises sustainable.

Members of the Mysore Industries’ Association (MIA) and similar organisations have also stated that this will be a positive step towards ease of doing business, and improving industrial and investment climate in the region.  

It was pointed out that Hootagalli City Municipal Council, which was constituted last year and includes the major industrial areas of Mysuru, has promulgated a tax rate that is reckoned to be the highest in Karnataka. 

Former MLA Vasu, who is the president of MIA, said Hootagalli Gram Panchayat was upgraded, and Koorgalli, Hootagalli village, Hebbal Industrial Area, Belavadi and Hinkal were incorporated under the new CMC. This is also the core industrial area of Mysuru, but the current tax slab promulgated by Hootagalli CMC was not only the highest in Karnataka but also antithetical to the State Government’s policy of bringing a separate and a lower tax slab for industries below the commercial slab.

While the tax stipulated is ₹2 per sqft in case of large industries, it was ₹1.50 per sqft for medium scale units and ₹1 per sqft for small scale units. In contrast, the tax rate was ₹0.80 per sqft for commercial properties and ₹0.50 per sqft for residential properties, and the tax on industrial sites is the highest in Karnataka, said Mr. Vasu.

In addition, ₹4,000 per acre has to be paid to Karnataka Industrial Area Development Board (KIADB) as maintenance charge in addition to a fee for building plan approval from KIADB and the local municipality.

A manufacturing unit in the area was billed over ₹40 lakh by way of property tax, including ₹96,192 as beggar’s cess, ₹1.92 lakh as library cess, a health cess of ₹4.8 lakhs and transportation cess of ₹64,128, by the Hootagalli CMC.

While the local urban bodies are quick to levy tax, they do not provide the requisite services proportionate to the tax collected. Hence, industrial layouts remain devoid of basic amenities, according to the stakeholders.

Suresh Kumar Jain, General Secretary, MSME Council, said over ₹33 crore has been collected by way of property tax from industries during the last six months, but the local authorities have not spent even a single rupee towards infrastructure development.   

Karnataka has announced a policy to have a separate slab for property tax on industries in urban local bodies at a rate less than what is charged for commercial properties. The Chief Minister proposed a separate property tax slab for industries in the 2021-22 budget to encourage more industries, said Mr. Jain.

Consequent to several representations made by various industrial bodies, the State Government proposed an industrial township authority with a single-window system for taxation, but it is yet to be implemented, said Mr. Vasu.

Due to the Covid-19 pandemic, almost 30% of the industries have closed. The tax rate could have an impact on the remaining units causing a negative bearing on jobs and employment, said Mr. Jain.

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