MIDC wants to collect tax in zones under it

MUMBAI: The Maharashtra Industrial Development Corporation (MIDC) wants tax collection rights of industrial areas, currently vested in municipal bodies, to be transferred to itself.

The MIDC has filed a review petition before the Aurangabad bench of the Bombay High Court, which recently passed an order to hand over the management of industrial zones within municipal limits to MIDC, as reported by ET on October 20. The HC order, however, was silent on who should have the power to collect taxes. “We welcomed the High Court order, but wanted some clarity on the issue of who should be collecting taxes from the industries located in MIDC areas but fall in municipal boundaries,” Rajiv Jalota, CEO, MIDC, told ET on Tuesday.

As of now, the municipal bodies collect various taxes, including the dreaded octroi. But there has been a long-pending demand from industries that this responsibility be handed over to the MIDC.

The issue was resolved last month when the Jalgaon association of small industries approached the high court seeking a directive to free industrial zones from the control of municipal bodies. “We want to be governed by MIDC — and not by municipal bodies — as we are in designated industrial zones promoted and developed by the state industrial corporation,” said Shyam Agrawal of the Jalgaon association.

The issue dates back to 1966 when the state government enacted the Maharashtra Regional Town Planning Act notifying industrial estates across the state. Chapter 6 of the Act created a special authority, the Maharashtra Industrial Development Corporation, MIDC, to run and manage these estates.

The Act, Section 113 sub-Section 5, clearly says once the industrial estates are set up and handed over to the MIDC, local self-governments will have no right over these industrial zones.

But as adjoining towns expanded, these estates fell within the municipal limits creating more confusion and bureaucratic troubles. The industry’s cost of operations increased as they had to make provisions for octroi and property tax, which were not applicable in MIDC areas.

Taking note of these variances, the Bombay HC directed the MIDC to take over administration of all industrial zones across the state. “We are willing to do that. But we want a right to collect development charges from industries, along with a share of revenue that has gone to municipal corporations for so many years,” Mr Jalota said.