BBMP proposes property tax on schools, colleges

For the first time, the Bruhat Bengaluru Mahanagara Palike (BBMP) has announced it will levy property tax on educational institutions.

In the budget tabled on Monday, the BBMP stated that it has made a proposal to the government to amend Section 110 of the Karnataka Municipal Corporations Act 1976, so that it can levy property tax on all schools and colleges, excluding government-aided institutions.

With this amendment, the BBMP will also target state and central government buildings which have not paid service charges in lieu of property tax.

By levying taxes on government buildings the BBMP aims to earn at least Rs 75 crore, and from educational institutions, at least Rs 50 crore. “So far, only 25% of service charge was being collected from these institutions, but now, they will have to pay property tax,” said a BBMP official.

“There is a shortage of funds and it is learnt that these educational institutions are making profits to the tune of crores of rupees. Education no more remains a service and has turned into a business. Thus the proposal has been made,” the official added.

According to the official, educational institutions are making money, but are not helping the corporation in improving facilities and infrastructure. Therefore, charging them is essential.

“In case of government buildings like Vidhana Soudha, Vikasa Soudha, High Court and Raj Bhavan, no property tax has been charged ever. But now to make ends meet, there is a need. However, properties belonging to the transport sector like BMTC and KSRTC have been dodging us for the last few years. The BBMP has no funds and even now six properties are mortgaged. This is a source of revenue, which cannot be ignored. Government institutions also need to set a precedence,” the officer justified.

However, educational institutions are not happy with the move. Shashi Kumar, Chairman, Karnataka Association of Management Schools said: “We will challenge the BBMP. We will not accept it. The BBMP cannot discriminate between government and private schools. We are providing education under RTE. We are doing a service. The MHRDA in 2017 had ordered that educational institutions should not be charged. This will increase the fees.”