Mumbai

BMC may penalise Sachin for evasion

Tendulkar could be among 75,000 car owners who might have to pay up difference in cess as penalty

Sudhir Suryawanshi

Posted On Monday, February 01, 2010 at 01:01:31 AM

Over 75,000 cars owners from Mumbai, who like Sachin Tendulkar had registered their vehicles in Navi Mumbai and Thane to save on cess, may have to pay a penalty to the Brihanmumbai Municipal Corporation (BMC) for evading the city’s taxes.

With the BMC having ordered an inquiry into this large scale evasion of cess, motorists may have to pay the difference between the tax paid in Navi Mumbai and that payable in Mumbai as penalty.

Since Mumbai charges a cess at a rate of 5.5 per cent of the vehicle cost compared to only one per cent charged in Navi Mumbai and Thane, the difference of 4.5 per cent could be the penalty payable by the vehicle owners.

Navi Mumbai Municipal Corporation (NMMC) recently served notices to Tendulkar, singer-composer Shankar Mahadevan and governor of Tripura Dr D Y Patil for not paying cess on luxury vehicle that were registered in Navi Mumbai.

The BMC has asked its vigilance department to investigate how many vehicle owners staying in Mumbai have registered their vehicles in Navi Mumbai to escape Mumbai’s heavy cess.

According to the BMC, around 75,000 vehicles that are used in Mumbai are registered outside the city. A senior civic official said BMC’s vigilance department has been asked to identify all such vehicles.

"We have asked them to inquire into the cases involving Tendular and Patil who have been sent notices by NMMC for not paying cess on their luxury vehicles.

The vigilance team will prepare at detailed report in a month and notices will be served to all these vehicle owners," said N A Pathan, chief of the BMC's octroi and property tax assessment department.

Senior BMC vigilance officials revealed that in order to save money, Mumbai residents, especially the rich and famous, buy cars from Navi Mumbai and Thane region or in some cases, import vehicles but register them in Navi Mumbai, because it levies a cess of 1 per cent, unlike the steep 5.5 per cent octroi charged on the car sale by the BMC in Mumbai region. "This is well known modus operandi used by car owners. Due to this, the BMC is losing a lot of revenue.

However, this time, we have decided to crack down on such car owners who have registered in Navi Mumbai but use their cars mostly in Mumbai," the official said.

While BMC officers are not sure how much revenue will be recoverd they believe that it will add substantially to their revenue. "The loss is more in the case of imported vehicles, many of which cost around Rs one crore. So, the recovery in these cases will be significant.

We have also decided to take help from the Directorate of Revenue Intelligence to get the details of imported cars," an official said, adding that the BMC is also contemplating to set up a special cell to revover revenue from such car owners and pursue bogus registration cases.

Pathan said that they will take help from the Navi Mumbai and Thane RTO offices to get the list of the people who have registered vehicles in their area, but whose owner address are located in Mumbai city.

Nitin Dossa, President of Western India Automobile Association suggested that instead of recovering high octroi from the car owners, the authorities should recover it from the dealers. "The owners are not responsible for not paying octroi.

In fact, the Gujarat government has abolished octroi and we should emulate them. If the BMC continues to charge high octroi, then nobody will buy cars in the city. I strongly oppose this move by the BMC and NMMC," said Dossa.

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