Mumbai: The legal complexities involved in the BMC’s retrospective tax assessment has delayed the property tax billing for 2023-24 fiscal. To avoid further gap, the civic body has now decided to send provisional bills, including 10% hike as per the five-year rule, to the taxpayers from next month, said a civic source. 

Adoption of the capital value system

The entire issue boils down to the civic body’s adoption of the capital value system for calculating property tax and levying new rates in retrospective manner from 2010 onwards. In 2019, the Bombay High Court had set aside certain rules pertaining to retrospective taxation. The municipality had challenged the order before the Supreme Court, but it got no relief. The apex court has directed the BMC to frame new rules and issue fresh bills to taxpayers. As a result, the civic body might also have to refund thousands of crores of rupees to the taxpayers who have paid property bills on the basis of the capital value system between 2010-2012. 

So, the BMC has to rework the capital values of all the properties besides refunding or adjusting the excess amount collected from the citizens in future bills. Citing inability to refund such a hefty amount, the municipality has requested the state government to make amendments to the BMC Act. As the matter is yet to be sorted, it has failed to send property tax bills for the period April 1 to September 30. 

“Though we are yet to send the bills for this fiscal, we have already collected previous year’s arrears of Rs496 crore. To avoid further delay, we will be sending provisional bills as per ready reckoner rat