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Excessive and unfair property tax increase in Belagavi Cantonment

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The residents of Belagavi Cantonment are profoundly shocked at the unprecedented, unparalleled and savage increases in property taxes proposed by Shri Barchaswa, the new Cantonment Executive Officer.

What has hurt everyone very badly (and, according to the Sakal Newspaper, in just 19 days, the CEO has received 500 objections to his proposed property tax increases) – is that the proposed tax increases which are as high as 3469% and 2026% (for St. Paul’s School), 1623% for St. Joseph’s School, 1052% and 774% for B.K. Model School), 2328% for a renovated bungalow, (B.C. 62, which has reduced its old plinth by 10%!), is that these astronomically high tax increases have hit us in the worst economic situation that this country has faced since 1991 when almost all sectors of the economy have lost ‘the josh’, and when Belagavi’s shop keepers and households are finding it extremely difficult to make ends meet.

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The Cantonment resident welfare association have explained the difficult economic situation to Shri Barchaswa on two occasions when their delegation gave him two representations and met him in his office.

The proposed quantum hike in property taxes in Belagavi Cantonment is unprecedented, unparalleled and savage.

1) Unprecedented: Belagavi was captured by Col. John Munro on 10th April 1818 and had a Cantonment formed on both its eastern and western sides by Government Order 99 of 1831.

In the past 202 years of its history, Cantonment taxes have been increased ‘pari passu’ with the increase in the income level of the people in this small town. In many years (as during the famine years, and the Plague years,) the British did not increase the taxes at all and even waived taxes.

Never once in the past 139 years of Belagavi ‘Cantonment’ has any CEO (British or Indian), ever attempted to increase tax by more than 10-15%. This is because incomes in this small town never increased by more than that rate.

Hence, these proposed tax increases are unprecedented.

2) Unparalleled: There are 62 Cantonments in India. It has not come to notice that any Cantonment has proposed property tax increases of any such magnitude. Indeed, on the Internet, we learn that in Chennai, the St. Thomas Mount Cantonment Board, on 19th November 2019, increased property tax by only 3.5% for residential units and 7% for commercial units. Pune Cantonment has increased taxes by 5%. So has Secunderabad Cantonment.

In fact, the Ministry of Defence has once already cautioned against any “quantum jump in the leviable tax” and advised taxes to be proportionate to the civic amenities provided and taxes be comparable to those in the neighboring municipality.

The Belagavi City Corporation has only increased property tax by 15% (with a 5% discount for payment in April).

3) ‘Savage’: A tax increase may be called ‘savage’ if it increases taxes on commercial establishments to their breaking point, heaps exorbitant taxes on State-aided educational institutions run by not-for-profit Societies, which derive no income for the Society whatsoever, but who have been serving the poorer children of Belagavi for even up to 188 years (Beynon Smith School was started in 1832).

Is this taxation of schools legal? According to Sec. 111 (2)(b) of the Cantonments Act, 2006, State-aided (as opposed to private) Schools are exempt from paying taxes.

Is this fair? The Societies that have been rendering yeoman service to the children of Belagavi are experiencing acute financial distress and do not even have funds to replace broken glass panes or paint the walls of the classrooms.

If they are burdened with such exorbitant tax increases how will they survive – and then how with the 2000 odd school children that each school has at present be educated in the future if these Schools close down?

Even family-run small shops are finding survival in the present economic slowdown difficult. The Covid-19 health scare has made survival even more difficult. Any more tax will be the straw on the camel’s back. A number of shops in Cantonment will have to close down permanently.

How can one think of building his own career on the ruins of another family’s business? And what about the unemployment this move will generate?.

CBB has also targeted clinics – cardiac care clinic (Rs. 2,490/- increased 2008% to Rs. 50,000/-) and children’s hospitals.

He has even targeted bungalow owners who have repaired and renovated their bungalows. He obtained a Supreme Court Order, by which the Cantonment Board was ordered to accord permission within three weeks to him to reconstruct his bungalow since the owner had proposed to reduce, not increase the plinth area of his bungalow by 10%. Now, CEO has proposed to increase his taxes from Rs. 6,700/- to Rs. 1,56,000/- i.e., by 2328%! Is this not vengeance in the guise of taxation?

Shri Barchaswa has informed the Press that he has been directed by the C.A.G, how to go about his tax increases.

C.A.G.’s role is to audit Central Government accounts, detect mistakes and raise objections. CAG has no role in formulating tax policy.

Further, even if we assume that someone from the CAG’s office has directed Shri Barchaswa to take such a quantum leap in taxation, then why has the CAG not done the same for the other 61 Cantonments in the country? Why target the people of Belagavi Cantonment? What have they done?

Belagavi Cantonment’s population count in the last census had dwindled to just 19,000 (from 25,000 in the previous census). This means that there are roughly 4750 families in Belagavi Cantonment. There are 1250 shops or businesses (of which 25 are non-taxable as they have crumbled to dust). 190 bungalows, (of which 7 are in a completely derelict state).

How can such a narrow tax base support the massive expenditure of a Cantonment that spreads over 1776 acres?

The Cantonment Board spends a staggering 1 lakh per month to maintain the gardens on both sides of just one road (Thimayya Road) which is landscaped for nearly Rs. 2.5 crores. It spends Rs. 35,000 per month for just one park, (Sharquat Park) and Rs. 17,000 per month on maintaining a small garden near the Old Post Office.

The residents appealed to see if Belagavi Cantonment can be persuaded to follow all other Cantonments and the adjoining Corporation in increasing taxes by a reasonable figure of 5%-10%.

Indeed, the SFC grant by the State Government to the Cantonment Board has been restarted and the 15th Finance Commission’s recommendation for providing GST compensation to Cantonments has also been accepted by the Union Finance Ministry, so the financial position of all Cantonments will be strengthened.

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