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The Nagpur Municipal Corporation (NMC) is grappling with a massive property tax arrears issue, with state government departments emerging as some of the largest defaulters. According to data from NMC's property tax department, the total outstanding property tax has reached a staggering INR 850.1 crore as of December 31, 2024. Government departments alone owe INR 83.74 crore in arrears, with an additional INR 10.06 crore for the current financial year, taking their total liability to INR 93.81 crore.
Key government departments have accumulated substantial dues. For instance, the regional transport office owes INR 25.39 crore, while the police commissionerate's unpaid property tax for residential quarters and police stations stands at INR 40.20 crore. Additionally, the deputy director of sports complex owes INR 12.87 crore. Government educational institutions and healthcare facilities also contribute to the growing arrears. The Government Polytechnic in Sadar has dues amounting to INR 4.6 crore, and the Public Health Laboratory in Sadar owes INR 31.2 lakh. Advertisement
While ordinary citizens and businesses face penalties and enforcement measures for non-payment, government entities have not been subjected to similar actions. To recover the mounting dues, the NMC introduced an amnesty scheme on January 1, 2025, offering an 80% waiver on the INR 770.45 crore in interest and penalties. The scheme, available until March 31, 2025, aims to incentivise defaulters to clear their outstanding taxes. The Maharashtra Municipal Corporations Act of 1949 permits the imposition of penalties and interest on unpaid property taxes, as well as the attachment or auction of movable and immovable properties to recover dues.
In an intensified effort to boost property tax collection, all 10 zonal offices of NMC have issued 628 warrants to defaulters. Of these, 404 warrants were executed, and 21 cases were settled on the spot, resulting in the collection of INR 20.73 lakh. Additionally, properties worth INR 2.66 crore have been attached as part of the recovery drive.
However, no enforcement measures have been taken against defaulting government departments, raising concerns about financial discipline and fairness. NMC officials argue that the lack of action against these entities undermines the corporation's efforts to enforce tax compliance among individuals and businesses. A senior official highlighted the broader implications by explaining that when government departments default on taxes, they set a precedent that makes it much harder to enforce compliance among citizens and businesses.
The NMC has warned property owners with unpaid taxes to take advantage of the amnesty scheme to avoid the seizure and attachment of their assets. The civic body has stated that it will continue daily enforcement actions to recover dues from defaulters. While the amnesty scheme provides some relief for defaulters, the NMC faces an uphill battle in addressing the INR 850.1 crore in outstanding property tax, compounded by the INR 770.45 crore in accrued interest and penalties.
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