The Delhi Development Authority (DDA) is not liable to pay property tax to the three municipal corporations of the capital by virtue of being â€œa statutory body established by an act of Parliamentâ€, according to the Ministry of Urban Development (MoUD).
Battling â€œfinancial difficultiesâ€, the MCDs have contested this position and claim DDA owes them more than Rs 1,600 crore in property tax since 2004.
â€œDDA being a statutory bodyâ€¦ namely, Delhi Development Act, 1957, is liable to pay service charges only and no property tax is liable to be paid by the DDA in respect of vested union,â€ the MoUD has decided.
The DDA and MCDs are also contesting the matter in Delhi High Court.
Ruling out conflict between the Centre and the MCDs on the matter, state BJP president Satish Upadhyay said Wednesday, â€œThe matter may need further clarification but if the DDA is using its properties for commercial activities, they should pay taxes to the corporations.â€
The DDA argues that being a statutory body, it is not liable to pay anything other than â€œservice chargeâ€ payable at 75 per cent of the property tax rates applicable on individual properties.
At a meeting with officials of the civic bodies, the DDA had offered to pay Rs 8 crore under this head. The MCDs refused to accept this amount and wanted property tax as per commercial rates, said officials. This means that on a property, where any commercial activity takes places or for which the DDA charges the public, the tax payable is four times the tax rate applicable.
NTPC, HUDCO, and state education department are among government bodies that owe property tax to the civic bodies.