22.01.2022- Advertisement tax merged with GST, yet Nagpur Municipal Corporation (NMC) charging it as licence fee

Advertisement tax merged with GST, yet Nagpur Municipal Corporation (NMC) charging it as licence fee

Nagpur: Despite advertisement tax merging in goods and services tax (GST), Nagpur Municipal Corporation (NMC) is still recovering it in the name of licence fee for permitting advertisements. On the other hand, the civic body has stopped taking these charges and action on 24 advertisement agencies which filed petition in the Nagpur bench of Bombay High Court.

NMC’s revenue department has tabled a proposal before standing committee seeking approval for a settlement with Sign Post India Private Ltd. The department has mentioned that a case related to recovery of advertisement licence fee is subjudice. A copy of HC’s order dated October 26, 2021, is also attached with the proposal.

The information about the petition and HC’s order came to fore from this proposal.

In June last year, West Nagpur MLA Vikas Thakre had written to all 27 municipal corporations in the state asking details about norms related to recovery of advertisement tax, property tax and other taxes. He then lodged a complaint with the state government and sent copies to all the municipal corporations stating they cannot recover taxes since implementation of GST on July 1, 2017.

Ahmednagar Municipal Corporation wrote to Thakre informing that it has stopped recovering advertisement tax from August 1. As per Thakre, Amravati district court had ordered Amravati district court had ordered Amravati Municipal Corporation to stop recovering advertisement tax on July 17, 2018. Accordingly, it was stopped. Allahabad High Court had directed Kanpur Municipal Corporation to even return advertisement tax to agencies on May 6, 2019. Similarly, Pune and two more municipal corporations stopped taking advertisement tax.

Before GST, the NMC was recovering charges in the name of advertisement tax. After GST, the NMC renamed it advertisement tax. After GST, the NMC renamed it advertisement license fee.

In October last year, 24 agencies of the city filed a petition in HC. In order dated October 26, 2021, the HC directed the NMC to stop recovering licence fee and allowed it to take only Rs1,000 that too for administrative expense from petitioners. The HC also ordered no action like removal of advertisement banners etc be taken till the final decision.

NMC official told TOI, “We are not recovering only Rs1,000 from petitioners and not taking action on them. HC’s order is limited only to petitioners and we are recovering licence fee and taking action on other agencies. We are also taking an undertaking that they are willing to pay the charges. Permission is denied to agencies not paying the charges and also not giving undertaking.”

Thakre said this is cheating and he will file a legal case. “I thought the NMC has stopped recovering charges after Ahmednagar municipal corporation accepted recovery of advertisement tax was illegal. Also, the HC had given interim relief to the agencies. The NMC should have implemented this for all agencies,” he said.

NAME CHANGED, CHARGES REMAIN

  • * NMC used to recover advertisement tax for giving permitting advertisement hoardings, banners etc
  • * Central government merged this tax with GST
  • * Also, government started giving GST grant to the civic bodies.
  • * NMC continued to recover the tax in the name of advertisement licence fee
  • * In June last year, MLA Vikas Thakre lodged complaint with government and NMC demanding discontinuation of tax recovery
  • * Ahmednagar municipal corporation accepted it as wrong practice and stopped tax recovery
  • * 24 agencies filed petition in HC in October last year
  • * HC gave interim relief and directed NMC to stop recovering licence fee
  • * Court allowed NMC to take only Rs1,000 for administrative expense from petitioners
  • * NMC has continued recovering licence fee from other agencies and taking action

Source- THE TIMES OF INDIA

https://timesofindia.indiatimes.com/city/nagpur/advt-tax-merged-with-gst-yet-nmc-charging-it-as-licence-fee/articleshow/89048110.cms

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