J&K: Property Tax Imposition Comes under Criticism from Political Parties

The Jammu and Kashmir (J&K) administration led by Lieutenant Governor (LG) Manoj Sinha issued a notification last week imposing property tax through urban local bodies – Municipal Corporations, Municipal Councils and Municipal Committees – in the Union Territory. The decision has evoked sharp criticism from several quarters, including trade bodies and regional political parties.

In October 2020 several amendments were made to the Jammu and Kashmir Municipal Act, 2000 and Municipal Corporation Act, 2000, paving way for the imposition of property tax, through the Jammu and Kashmir Reorganisation Act, 2019, that was passed after the abrogation of Article 370 extending central laws to the erstwhile state.

“Unless exempted under this Act or any other law for the time being in force, property tax shall be levied on all lands and buildings or vacant lands or both situated within the municipal area,” said the amended Municipal Act.

The amendment had elicited strong opposition from regional political parties, including the National Conference (NC), Peoples’ Democratic Party (PDP) and the Jammu and Kashmir National Panthers Party, who called it another addition to the “slew of exploitative measures taken by the Centre since August 5”, following which LG Sinha said that there was no plan to implement any such tax.

“The UT government isn’t imposing property tax as being misrepresented by some people. However, the Urban Local Bodies are competent to decide on such issues in consultation with the public and for the development of the ULB’s themselves,” Sinha had said in October last year.

Similarly, In 2011, the then NC-Congress coalition government had passed a Bill proposing the setting up of a property tax board and implementation of property tax in the budget session. It was cleared by the selection committee three years after it was first proposed. However, the Bill was met with stiff opposition by political parties who had alleged that the economic condition of the erstwhile state didn’t favour such a tax and the move was shelved with no one appointed to the board.

Downhill economy

As Jammu and Kashmir reels under the aftermath of two consecutive lockdowns – one following the abrogation of Article 370 and the second to curb the COVID-19 pandemic – the question that arises is if the economic condition is conducive enough to implement the tax now.

Speaking to Newsclick, Arun Gupta president of the Jammu Chamber of Commerce and Industry (JCCI), said that business in J&K was badly affected following August 5,2019. “No major economic activity has taken place in the last two years. We are yet grappling with those losses, unemployment has increased, people are struggling to make ends meet. At this time the government should be thinking of reducing taxes on the people but unfortunately we are being bombarded with new taxes,” Gupta said.

The Kashmir Chamber of Commerce and Industries (KCCI) had pegged the economic losses suffered by the business community at $5.3 billion.

Sheikh Ashiq, president, Kashmir Chamber of Commerce and Industry (KCCI), a prominent traders’ body, said that the need of the hour was to strengthen the local economy. “We have been saying from day one that the economic condition in Jammu and Kashmir doesn’t favour such decisions. These decisions should come when a region is fully developed. We are still in revival mode and such a decision will add to our sufferings. We urge the administration to review this decision,” he added

As reported by Newsclick earlier, urban development is a state subject and with no assembly in place, the implementation of such laws amid strong opposition will result in further alienation.

Speaking to Newsclick, Mayor of the Jammu Municipal Corporation (JMC), Chander Mohan Gupta, said: “The property tax has not been implemented yet. There is a general house meeting in the coming days where it will be decided.”

Notably, the notification to implement the tax came days after the DDC chairman was elected. “It will come under the jurisdiction of ULBs,” Gupta added,

Property Tax: Vikas Shulak or Development Charges?

In the backdrop of huge resentment the Jammu Municipal Corporation (JMC) is mulling over changing the name of Property Tax to ‘Vikas Shulak;.

“Yes, once the implementation of the property tax is approved in the general house meeting, we will change its name to Vikas Shulak or Development charges,” the Gupta clarified.

When asked about the reason behind the name change, he said it was to quell dissent. “When we say Property Tax people start thinking of some exploitative tax regime as during the times of the Raja (King). Hence, the name change will help them understand that it is in the name of development,” he said.

Political commentators believe that changing the name to “deceive” people so that the property tax can be imposed smacks of “coercion”. It also comes in the backdrop of the central government loan scheme of Atma Nirbhar Bharat that has a precondition of paying property tax through which the state administration could borrow some funds.

Meanwhile, the Congress in J&K announced that it would intensify its protest against the central government’s “tax-terrorism” by organising a series of dharnas across the UT.

In a press conference, G.A. Mir, JKPCC president said: “The government has let loose a reign of terror by imposing heavy taxes of various kinds and the common man is unable to manage his livelihood. The BJP came to power with the slogan of `Achhe Din’ but has gifted tough days instead with unprecedented price hikes, rising unemployment, anti-farmer and anti-youth policies and high taxes.”