ROLE OF CCI IN SHAPING PROPERTY TAX POLICY IN J&K

Property tax can be an important source of revenue for local governments, including those in Jammu and Kashmir. As the region develops and urbanization increases, there will be a growing need for public infrastructure, services, and amenities. Property tax can help fund these needs, enabling local governments to provide better living conditions and enhance the quality of life for residents. Additionally, the government should provide adequate exemptions and relief to vulnerable sections of society, such as low-income households and small businesses. Overall, property tax is an important tool for local governments to generate revenue and provide essential services to their constituents. However, it is crucial for the government to ensure that the implementation of the tax is done in a way that is equitable, transparent, and sensitive to the needs and concerns of the local population.

The Jammu and Kashmir administration’s decision to levy a property tax on residents living under the jurisdiction of urban local bodies (ULBs) has sparked concerns among the people. The decision, which comes into effect from April 1, 2023, has been met with criticism from various quarters, with many arguing that the tax is being imposed without proper consultation and that it will impose an unnecessary financial burden on the residents. Property tax is a tax levied by local governments, in this case, municipalities and municipal councils, on the owner of a specific piece of property. It does not apply to the sale or purchase of the real estate. The absence of a provision for property tax in the erstwhile state prior to August 5, 2019, when Article 370 was repealed, has raised concerns about the legality and legitimacy of the tax. The J&K Reorganisation (Adaptation of State Laws) order, 2020, amended various laws, including the J&K Municipal Act, 2000, and the J&K Municipal Corporation Act, 2000, in October 2020. Under the amended municipal Act, a property tax will be levied on all lands and buildings, vacant lands, or both located within the municipal area.

While the government has claimed that the tax is being imposed to raise funds for municipalities because “they have no funds of their own” and to develop smart city projects and infrastructure, many residents are unconvinced. They argue that the tax is being imposed without proper consultation and that it will impose an unnecessary financial burden on the residents, many of whom are already struggling to make ends meet. Moreover, the tax has been criticized for its lack of clarity and transparency. The amended Act states that the property tax shall be levied at such a percentage not exceeding 15% of the taxable annual value of land and building or vacant land or both, as the government may from time to time specify by notification. However, there is no clarity on how the taxable annual value of land and building or vacant land will be determined, leading to concerns that the tax will be arbitrary and unfair. Many political parties have criticized the tax, as have members of the Srinagar Municipal Corporation. Local tax and economic experts are also divided on the initiative’s merit, with some arguing that it will help raise much-needed funds for municipal development, while others are concerned that it will impose an undue burden on the residents and discourage investment in the region. While the government has claimed that the tax is necessary to raise funds for municipal development, many residents are unconvinced and are demanding greater transparency, clarity, and consultation before the tax is implemented.

Overall, the chamber of commerce and industries of Jammu as well as  Kashmir have an important role to play in shaping the conversation around property tax implementation in the region. By taking a proactive and collaborative approach, they can work to ensure that the concerns of all stakeholders are heard and addressed and that the tax system is fair, transparent, and sustainable for the long term. This could include lobbying the government to modify the tax structure or exemptions or providing guidance and support to businesses on how to comply with the new regulations. In addition, the chamber may also seek to raise awareness among the general public about the implications of property tax, particularly for homeowners and low-income families. This could involve organizing information sessions, publishing educational materials, or engaging with the media to ensure that the public is well-informed about the issue. Overall, the CCI has an important role to play in shaping property tax policy in Jammu and Kashmir. By working together with local businesses and residents, the organization can help to ensure that the tax is implemented in a way that supports economic growth and development in the region.

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