Mumbai’s housing societies are up in arms against the hefty property tax bills, with arrears for the past three years, they have recently received and the even fatter bills they are expected to receive in the coming years. Rajendra Thacker, president, Society for Fast Justice, explained why there was absolutely no need to raise the tax and suggested specific remedies to various problems
Due to great public interest in the matter, Moneylife Foundation held a seminar on the property tax burden by Rajendra Thacker, president, Society for Fast Justice, just two months after Ashok Ravat and Advocate Godfrey Pimenta helped people understand the problems with the capital value method used by the BMC to arrive at the new property taxes.
Mr Thacker, a veteran of many public interest litigations, most of them successful, first discussed BMC’s (BrihanMumbai Municipal Corporation) official reasons for changing its method of valuation. He said, “Officially, the BMC said it wished to move away from the rateable value method because it wanted to rationalise the system, as the old one did not factor in all that was necessary. The new one is, however, no more rational than the old one and has increased taxes substantially.”
The main reason the capital value method is flawed is that it uses the Ready Reckoner value, which is not supposed to indicate real value. The Ready Reckoner value is only supposed to be used to calculate stamp duty, not to assess capital value. By using this rate, the BMC has ensured that flats over 500 sq ft pay high taxes, of up to three times what they were earlier paying, and has given itself permission to raise taxes on smaller flats by 40% from 2015. Mr Thacker said, “The BMC collects taxes from us for certain facilities, such as water, maintenance, among other things. If you see what we’re paying and compare it with what is spent, you’ll notice that there has always been a surplus. If there is a surplus, why do they need more of our money? I filed an RTI to find out what exactly is the figure and how the new method was decided, but I received no answer. This is why I filed a PIL. This is because if there is something wrong with my bill, there is something wrong with everyone’s bill in Mumbai.”
Recently, the last date for payment of the bill sent with arrears was postponed to 30th June from 31st March and it was said that the guidelines will be changed. Mr Thacker said, “If there is something wrong with the guidelines, which is the only reason why they will propose to change it, why should we be paying it? Furthermore, I don’t see why there is such difference in the bills we are receiving. The BMC is charging us for the services it provides us, as under Section 61 and 62. There shouldn’t be such a grave difference in the price for these services in Borivali and Colaba.”
The BMC’s new property tax rules, Mr Thacker said, make it seem as if it is a crime to be rich. He said, “Those who earn more money are already paying higher taxes and were always paying for living in larger homes. But now the BMC wants us to pay extra if the builder used certain expensive materials to build our homes or if we live on higher floors. Why should property taxes be based on the floor I live on? Does the BMC provide better services to those on higher floors?”
BMC’s rules cannot be arbitrary, but this is exactly what is happening with its current property rules. Mr Thacker said, “I own two shops in Borivali, one of which is 451 sq ft, while the other is 300 sq ft. For the larger shop, I pay Rs300 as tax on now. I’m paying Rs1,300 on the smaller one, though. Now how this is happening is unclear. This is why we need to go to court.”
Mr Thacker advised property owners who have found errors in their bills to send their objections to the BMC. For example, a tenant in a 49-year-old building received a bill of Rs934, but this was based on calculations for an 18-year-old building. Mr Thacker advised him to prove to the BMC that his building was 49 years old, by sending proof, such as a ration card or occupation certificate.
Another participant asked what the difference between rateable system and capital value system was. Mr Thacker said, “The old system was according to the rent you could fetch and various other complicated factors. It was an incomprehensible method, but the BMC was doing it. The capital value system factors in the flat value, the materials used to construct the building, the floor you live on and many other things.”
Finally, Mr Thacker asked participants to send their bills (both old and new) to him or Moneylife Foundation, in English, Gujarati or Hindi, so that he and his team could go further their investigation into the matter.
Trading in securities of the nine companies will be suspended with effect from 30 April 2013, for a period of 15 trading days, on account of non- compliance with the provisions of the Listing Agreement, the exchange said
Bombay Stock Exchange (BSE) the country's premiere bourse, has said it will suspend trading in securities of nine companies for their failure to comply with various provisions of the listing agreement.
These companies will be barred from trading with effect from 30th April, this year.
The nine companies facing suspension are—GCV Services, Indo-Pacific Software & Entertainment, IOL Netcom, Jai Mata Glass, Mahaan Foods, Midfield Industries, Priyadarshini Spinning Mills, Regency Trust and Suraj Industries.
These firms have not fulfilled the BSE requirements for continuous listing till the quarter ended December 2012, BSE has said in a statement.
“Trading in securities of these nine companies will be suspended with effect from Tuesday, 30 April 2013 (being 15 trading days from issue of notice); on account of non- compliance with the provisions of the Listing Agreement,” it said.
As per the stock exchange, if the companies comply with listing norms on or before 18 April 2013, trading in their securities would be suspended for five days up to 7th May.
However, if they fail to do so, the suspension would continue till such time the company complies with the procedure laid for revoking suspension, it added.
“...suspension of trading in securities of a company will be revoked only if the company has complied with all the provisions of the Listing Agreement up to the latest quarter for which the compliances are required,” BSE said.
If today’s low on the Nifty is broken, it may hit 5,490
The Indian market settled lower for the third straight day on selling by overseas investors in fast moving consumer goods, consumer durables and capital goods sectors. If today’s low on the Nifty is broken, the index may touch 5,490. The National Stock Exchange (NSE) recorded a volume of 55.99 crore shares and advance-decline volume of 770:773.
The Indian market opened in the negative despite supportive global cues. Markets in Asia were trading higher in opening deals on the back of the Bank of Japan’s pledge to support its stimulus programme and on the European Central Bank president Mario Draghi announcement on Thursday to continue with the loose monetary policy for an “extended period”. Overnight, US markets settled marginally higher on optimism from Japan.
The Nifty opened seven points lower at 5,568 and the Sensex started off at 18,494, a cut of 16 points over its previous close. The market witnessed sideways movement till late-morning trade in the absence of any domestic triggers.
However, selling pressure from fast moving consumer goods, power, capital goods and banking stocks pushed the Sensex lower in noon trade. But select buying in the auto and metal sectors helped the market pare its losses in post-noon trade.
Volatile trade continued till the end of the trading session keeping the indices in the red. A negative opening of the key European markets added to woes of the domestic market. The Nifty traded in the range of 5,535 and the Sensex oscillated between 18,389 and 18,525 today.
The market settled in red for the third day in a row on unimpressive economic indicators and cautiousness ahead of the quarterly earnings season, which kicks off next week.
The Nifty fell 22 points (0.39%) to 5,553 and the Sensex ended the session at 18,450, down 59 points (0.32%).
The broader indices settled mixed today. The BSE Mid-cap index added 0.02% while the BSE Small-cap index fell 0.15%.
The top sectoral gainers were BSE Oil & Gas (up 1.65%; BSE Auto (up 0.55%); BSE Metal (up 0.31%; BSE PSU (up 0.14%) and BSE Healthcare (up 0.06%). The main losers were BSE Fast Moving Consumer Goods (down 1.74%); BSE Consumer Durables (down 0.78%); BSE Capital Goods (down 0.72%); BSE Power (down 0.56%) and BSE Bankex (down 0.36%).
Sixteen of the 30 stocks on the Sensex closed in the positive. The chief gainers were Maruti Suzuki (down 7.23%); ONGC (up 2.20%); Wipro (up 2.17%); Reliance Industries and Sterlite Industries (up 1.77% each). The top losers were HDFC (down 2.84%); ITC (down 2.79%); NTPC (down 2.42%); Bharti Airtel (down 1.13%) and ICICI Bank (down 1.11%).
The top two A Group gainers on the BSE were—Indraprastha Gas (up 11.45%) and Maruti Suzuki (up 7.23%).
The top two A Group losers on the BSE were—NMDC (down 4.48%) and Indian Bank (down 4.07%).
The top two B Group gainers on the BSE were— Shimoga Technologies (up 25%) and Thiru Arooran Sugars (up 20%).
The top two B Group losers on the BSE were—Garware Polyester (down 18.69%) and IOL Chemicals (down 14.53%).
Of the 50 stocks on the Nifty, 21 ended in the green. The key gainers were Maruti Suzuki (up 7.18%); ONGC (up 2.23%); HCL Technologies (up 2%); Sesa Goa (up 1.80%) and Hindalco (up 1.69%). The major losers were NMDC (down 4.94%); ITC (down 2.90%); HDFC, NTPC (down 2.87% each) and Ambuja Cement (down 2.51%).
Markets across Asia closed mixed as the Bank of Japan’s move to continue with its loose policy propped up some indices. On the other hand, markets in China, Hong Kong, Singapore and South Korea were lower on concerns about the global economy.
The Jakarta Composite rose 0.07%; the KLSE Composite added 0.01% and the Nikkei 225 surged 1.58%. Among the losers, he Hang Seng tumbled 2.73%, the Straits Times fell 0.24% and the Seoul Composite tanked 1.64%. Markets in China and Taiwan were closed for a local holiday.
At the time of writing, markets in Europe were down between 1.27% and 1.82% and the US stock futures were trading lower, indicating a lower opening for US stocks lower in the day.
Back home, foreign institutional investors were net sellers of equities amounting Rs326.21 crore on Thursday while domestic institutional investors were net buyers of shares totalling Rs64.73 crore.
UK-based Diageo Plc will kick launch its over Rs5,441-crore open offer to acquire an additional acquire 26% in United Spirits from 10th April. The open offer will close on 26th April. In a filing with the exchanges, United Spirits said the offer price shall remain at Rs1,440 per equity share. United Spirits closed 4.20% lower at Rs1,749.15 on the NSE.
Real estate major DLF today said that it will sale its windmills in Tamil Nadu and Rajasthan to two different companies as part of its stated objective of divesting its non core assets. While the Tamil Nadu windmill project is expected to fetch Rs189 crore, the windmill in Rajasthan will be sold for lump sum of Rs52 crore. The stock declined 0.77% to close at Rs232.90 on the NSE.
Uttam Galva Steels, in which the world’s largest steel maker ArcelorMittal has 33.80% stake, today said it has raised Rs76.14 crore through placement of shares to Mauritius-based Albula Investment Fund. Uttam Galva declined 4.51% to close at Rs69.80 on the NSE.