Malls, star hotels, govt among major property tax defaulters
Mar 31, 2014
Source : The Times of India
CHENNAI: Corporation of Chennai has been falling short of its property tax targets for several years. While officials say the total arrears amount to around 250 crore, data accessed by TOI through an RTI application shows that more than 55 crore is due from the top 50 private defaulters. According to records, Chennai's oldest mall, Spencer Plaza, spread over 10 acres on Anna Salai, owes the most at 8.10 crore.

"We have sold several portions of the buildings to various firms. They may not have paid the property tax but we have paid the tax for the portions that we own," said M Balasubramanium, director of Mangal Tirth, which developed Spencer Plaza. Asked why corporation records use the name Spencer, he said that new buyers may not have registered with the corporation.

Spencer Plaza is followed by Indralok Hotel, Adyar Gate (now Park Sheraton), Toshiba JSW Turbine and Generator Private Limited, and J Hotels Ltd (now Accord Metropolitan, T Nagar). Others include shopping malls, IT parks, hospitals, clubs, educational and charitable institutions and banks. However, the majority of big defaulters are luxury hotels - Indralok Hotel ( 4.54 crore), Park Sheraton ( 4.16 crore), Accord Metropolitan, T Nagar ( 2.97 crore) and Breeze Hotel in Poonamallee High Road ( 1.96 crore).

R Srinivasan, secretary of Tamil Nadu Hotels' Association, says disputes are the main reason for arrears piling up. "The property tax assessment of the corporation might be wrong and then the hotel owner may have to approach the court against the excess property tax. And, such cases would be pending in court".

Corporation officials agree that the cause of arrears is delays in courts. "The delay in the disposal of cases under litigation is the major hindrance to recovering the dues. For instance, if we revise the property tax of an establishment, then the party approaches the court and gets a stay order," said an official.

Sources say owners of several large buildings continue to underestimate their property tax value and pay lower tax to the corporation. "Political pressure stops us from cracking down on these violators," the official adds.

Several government institutions, including CMDA, magistrate complexes, police stations, housing board apartments, slum board tenements and Southern Railway are defaulters.

In its RTI reply, the corporation said it did not have the records of all private-government defaults. In 2009, it began uploading the names of defaulters with arrears of more than 1 lakh on its website, but soon discontinued the practice.

In Chennai, the number of taxpayers increased from 6.5 lakh to 10.82 lakh after expansion of the city but tax collection has not risen in tandem. There is no fine for late payments nor an incentive for advance payments.


That an assessee has moved court and obtained an interim order in his favour is no excuse for noncollection of tax dues. While rushing to court is the right of an assessee, no one can say the corporation does not enjoy similar rights. A court granting interim orders has powers to vacate such orders, provided the authorities of the government convince the forum that stay orders would starve the exchequer. Interim orders are meant to be interim relief, and corporation should not waste time to get them vacated, by presenting facts to the court. A couple of years ago, the I-T department, battling interim orders and unable to recover dues as the matters remained in court, compiled a list of pending tax matters and presented the chief justice with a request that they be given priority and if possible, a special bench be constituted. Chennai corporation could resort to a similar strategy.


Latest Realty News

Poll priorities: Amma canteens, Aadhaar cards keep them busy
Mar 31, 2014
CHENNAI: Buying rice and curd can take much of someone's time, according to corporation officials. The reason for the poor record of the civic body in collecting property tax is that revenue staff are spending much of their time procuring provisions for the expanding Amma canteens, they say.
Rane Group puts Chennai property on the block
Mar 31, 2014
CHENNAI: The Rane Group has put on the block a 3.5-acre plot in the prime suburb of Velachery in south Chennai.
Reaping a rich harvest
Mar 28, 2014
CHENNAI: Farmland is not an automatic association with real-estate investment though it can offer rich pickings.
Tirupur Corporation to increase tax collection
Mar 27, 2014
TIRUPUR: Chairman of Taxation and Finance Standing Committee in Tirupur Corporation R. Chandrasekar presented the budget for 2014-15 financial year with fiscal deficit projected at Rs. 17.39 crore.
Portal to make business easy for traders
Mar 27, 2014
CHENNAI: Traders and entrepreneurs in the city will soon be able to pay property tax, profession tax, or obtain a trade licence from the Chennai Corporation and even pay tax to the Commercial Tax Department through the Central government’s G2B portal, eBiz.
IIFL home bonds oversubscribed
Mar 26, 2014
CHENNAI: The issuance of unsecured redeemable non-convertible debentures by India Infoline Housing Finance Limited (IIHFL), the housing finance subsidiary of IIFL Holdings Limited, has been oversubscribed 2.24 times of the base issue. Based on stock exchange data, total collections stood at Rs 224.5 crore, which is 2.24 times of the base issue.
CREDAI trying to sign MoU with TN educational institutions to develop students’ technical skills
Mar 26, 2014
CHENNAI: Just 20% of the 2.5 lakh engineering graduates passing out of colleges in Tamil Nadu every year are employable, said Sandeep Mehta, president of Confederation of Real Estate Developers' Association of India (CREDAI), on Tuesday.
Mall space in Chennai to see momentum after LS elections
Mar 26, 2014
CHENNAI: The mall space in Chennai is expected to see an improvement in momentum after the Parliament elections as there might be some policy changes on the anvil for the retailers, according to commercial real estate services firm Cushman & Wakefield.
Manage your property lease with ease
Mar 25, 2014
CHENNAI: Classmates, friends and business partners — this is the story of Sarfaraz Nazeem and Leeladharr TV, who quit their jobs to start a company that helps customers manage their multiple property leases online.
Chennai: Marked by mansions
Mar 25, 2014
CHENNAI: When a bachelor comes to Chennai for work or higher education, the hunt for accommodation invariably takes him to what is known as mansions. When Anand Nair, a city-based banking professional came to Chennai for his job, he was taken to one of the many mansions in the busy lanes of Triplicane and he was taken by surprise with the complete contrast he saw. “By a mansion, I had quite a different picture in my mind. What I saw was a building with many rooms, which was more or less like a l

Latest Realty News Of State

Realty Talk's