GVMC whip on Central offices

Visakhapatnam: The railways and the Navy are service-tax defaulters to the GVMC, which has been starving of financial resources.

The civic authorities to collect around Rs 11-12 crore from both the organisations for using roads, water and other infrastructure.

In fact, the Central government offices, institutions and public sector undertakings shall pay service charges to the local bodies for using their infrastructure.

The Supreme Court also pronounced a verdict in 2003 regarding the charges, which are to be borne by the organisations.

“We have identified areas in the city where to impose taxes and actually have to collect service tax at 33.3 per cent from these organisations for utilising our infrastructure, but have to finalise the percentage. The East Coast Railway also wrote to the Railway Board regarding the issue,” said commissioner M.V. Satyanarayana.

Under Article 285 (2) of the Constitution, the Central government is liable to pay taxes to the local bodies.

The quantum of service charges  shall be calculated on the basis of colonies which do not directly avail civic services within the area and are self-sufficient in all respects, will be 33.3 per cent of the normal rate or property tax applicable to private properties, said a senior official of the East Coast Railways. In respect of colonies, where only a partial use of the services is made, the charges will be paid as 50 per cent of the normal property tax rate.

But it should be 75 per cent of the property tax rate in case municipal body provides services normally realised from the private individuals.

“Similar to the Railways, the Indian Navy has also to pay these charges as per the rule book. We have been negotiating them for payment of such charges on regular basis,” said an official from the GVMC.