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Property tax evaluation: KMC plans to form body to review UAA system

This system of categorisation and uniformity in BUAV within the same category brings about a kind of macro-level equity in valuation across the entire city.

Statesman News Service | Kolkata |

With certain commercial establishments in the city reeling under property tax burden, the Kolkata Municipal Corporation (KMC) has sent a proposal to the state government for approval in forming a 13-member committee to review the unit area assessment (UAA) system of property tax evaluation.

In a mayor-in-council meeting, a proposal was placed to form a committee with the MMiC Atin Ghosh as its chairman. The committee will also comprise other KMC members such as the chief municipal law officer, chief municipal auditor, chief revenue managers etc. The committee will specifically review the final base unit area values (BUAV) of properties.

Under the UAA method, wards are divided into blocks using a statistical method and these blocks are further categorised into one of seven categories (A, B, C, D, E, F and G with A being the highest and G being the lowest category.) Each of these seven categories is assigned a particular BUAV which is the specific initial annual value per sqft for properties situated within a block having a specific category.

Illustrating how it works, KMC data reveals that if two areas, such as Park Street and Alipore, fall in blocks with the same categorization level, then even though they are located in two different wards, all properties located in these two areas will have the same BUAV, and under all circumstances, the same BUAV will be higher compared to a property located in an area (say Naktala), which may have been categorised at a lower level on account of its level of development, availability of infrastructure, etc. This system of categorisation and uniformity in BUAV within the same category brings about a kind of macro-level equity in valuation across the entire city.

A KMC official confirmed that the proposal has been sent to the state government. Commenting on the need to review, he said that certain commercial establishments are reeling under property tax burdens. The provision to review these values by a committee is permitted under Section 174A of the KMC Act.

The KMC had switched to the UAA system since the former annual rateable value method lacked scientific and regulatory guidelines for arriving at the reasonable rent of a property depending on its location, characteristics and usage which left ample scope for “subjectivity, ambiguity and arbitrariness in the determination of tax”.