Property Tax In Bengaluru: 4 Types Of Cess You Don't Know You Are Paying

In Bengaluru, the Bruhat Bengaluru Mahanagara Palike (BBMP) levies cesses that you may or may not know about. These include beggar cess, library cess, garbage cess and labour cess. About 24 per cent of the property tax you pay constitutes payments towards these cesses. Take a look at these: 

Beggar cess 

The BBMP collects three per cent of your property tax for the rehabilitation of beggars in your city. The Karnataka Prohibition of Beggary Act, 1975 empowers the BBMP to collect the amount. As per a New Indian Express report, the BBMP owes about Rs 130 crore from 2008 to date to the Central Relief Committee under the Social Welfare Department.

Across Karnataka, there are 14 rehabilitation centres and in Bengaluru, one of the centres houses 700 people trained for employment and given a salary that is collected from the property taxes.

Library cess 

According to media reports, the BBMP has held back Rs 183 crore from the concerned department, that is the Department of Libraries which maintains 200 libraries. This has hampered the development and maintenance of public libraries.

As per Rule 30 of the Public Libraries Act 1965, libraries are entitled to six per cent of the property tax collected by the BBMP. The civic body can retain 10 per cent of the library cess incurred to collect it and the balance shall be paid to the city library authority.

Garbage cess 

As of now, garbage cess is a nominal amount but the BBMP’s Solid Waste Management department was mulling that an amount up to 15 per cent of the property tax that citizens pay should be collected from the civic body towards the upkeep of the cities. Although this comes as a blow, the only cushion that has been doing the rounds is that those who segregate and compost wet waste should be given a 50 per cent waiver. For example, if the cess is Rs 1,000, the establishment (apartment complexes, etc) would need to pay only Rs 500 per person. Do note that garbage cess, as of now varies and depends on the size of the unit.

However, methods to scrutinise whether a claimant is actually segregating is difficult, agrees the authority. Some may claim a waiver to save up the cost but not act ethically. As of now, less than 10 per cent of the property tax collected goes towards this cess although, in 2017-18, the BBMP spent Rs 1,000 crore on solid waste management, Residents say that a hike may not necessarily guarantee better civic facillities.

This is not the first time that cess and rebate have been proposed but any change or hike and rebate would need to be included in the Karnataka Municipal  Corporations Act, 1976 as an amendment. 

Labour cess 

The utilisation of labour cess has been poor, observed the Accountant General (General and Social Sector Audit) and needs examination by the government.

The cess is applicable on individual residential houses that exceed Rs 10 lakh in value. In Karnataka, those who seek building plan approval have to pay a one per cent cess towards the state’s labour department as labour cess. This is then utilised for the welfare of construction labourers and their families.

The Building and Other Construction Workers’ Welfare Cess Act 1996 and the Government order issued in January 2007 reads, “The BBMP and local authorities, during the time of approval of the construction work, shall obtain estimated cost of the construction along with building plans. Such bodies shall upfront collect an amount of one per cent of the estimated cost furnished along with building plans, remit by way of a crossed demand draft in favour of the Karnataka State Building and Other Construction Workers’ Welfare Board.”

While citizens may point out that the BBMP has not passed on the funds to the concerned departments, it is widely known that the civic body has been unable to collect its target revenue.

For example, in 2015-16, the BBMP could collect only 73.8 per cent of its target revenue. In 2016-17 it was 73 per cent of its target while in 2017-18, the body managed to collect only Rs 1,655 crore only which is 64 per cent of its target revenue. Of the 19 lakh properties, BBMP could collect from only 18.34 lakh property owners. The deficit that is caused due to citizens not paying their dues is also of grave concern, amounting to negligience by the BBMP which is totally dependent on funds for development.