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Whether municipal corporation has power to collect tax on cell phone towers?

(Querist) 27 October 2012 This query is : Resolved 
Respected Experts,

My client owns a residential building in Andhra Pradesh which comes under the jurisdiction of Ongole Municipal Corporation. In the top floor of the said building, he got erected a cell phone tower in or around 2005. On 25-9-2012,for the first time, Ongole Municipal Corporation has issued a notice to my client demanding him to pay tax at the rate of Rs.5,000/- for every six months right from the year 2007 till the date of notice and also in future.

My queries are :

1. Whether Municipal Corporation is entitled to levy tax on cell phone towers from the building owners?

2. If so, is there any limitation period for collecting the same?

Please reply. Thanks in advance.
Bhawani Mahapatra (Expert) 27 October 2012
Dear Sridhar

Municipal Law differs from state to state, hence first check the related provisions in the said law with respect to your state. Secondly in most of the states, Municiapl authorities are the licensing authorities for erection of cell tower within their jurisdiction and for that purpose the telecom companies use to obtain license after paying required license fee and they renew the license from year to year. The Land lords never pay any additional fee to the municipal authorities for the same.
Guest (Expert) 27 October 2012
1) Taxation of any property within the territorial limits of a municipality falls within the jurisdiction of a municipal corporation.

2) Municipality acts as a local administration of the District/State Government. No limitation period applies to Government dues for realisation purposes.
ajay sethi (Expert) 27 October 2012
Property tax on cell towers? Bombay High Court to rule

Can a municipal corporation levy property tax on mobile towers and equipment on rooftops and building terraces? The Bombay High Court will decide on the issue while hearing a petition filed by Viom Infra Networks, a telecom company.

A division bench of Justice VK Tahilramani and Justice ML Tahiliyani has issued notices to the Kalyan-Dombivli Municipal Corporation (KDMC) and its municipal commissioner, asking them to file a reply by January 23.

In the meanwhile, the high court has also restrained the KDMC from taking any coercive action against the mobile towers of Viom Infra Networks, pending the hearing of its petition. The court has specifically ordered the KDMC to not dismantle or demolish the mobile towers till their final order.

Viom Infra Networks had filed a petition in the high court challenging notice issued to them by the KDMC levying property tax for cell towers and equipment installed on rooftops and building terraces.

Viom received property tax bill from KDMC in May 2011 for one of their towers at Anand Bhuvan building in Dombivili.

They received similar bills in respect of four other sites in December 2011 and also started receiving calls from KDMC officials threatening coercive action against the cell phone towers.

Property tax was levied on the basis that such towers or equipment constitute a new building/structure and hence is independently subject to property tax.

The municipal corporation also levied penalty on Viom on the pretext that the cell towers are illegal and unauthorised.

According to Viom’s petition, it has entered into leave-and-licence agreements with the building owners before installing the said towers and that as a precautionary measure it has also permission from the corporation for doing so.

The firm’s petition also states: “The telecom towers, which are not permanent structures, are temporarily installed. Further, the installation of such towers are crucial for the functioning and operation of a mobile telephone system.”

+ -

ajay sethi (Expert) 27 October 2012

Corporation to tax mobile phone towers

Binoy Valsan, TNN May 1, 2012, 01.20AM IST

COIMBATORE: The city corporation is presently engaged in a bitter struggle with cellular phone service and infrastructure providers to include the mobile phone towers in its limits under its tax net. It is also reworking its strategy to bring the mobile towers under its tax net and plans to convene a fresh meeting with the telecom service and infrastructure providers operating within its limits to seek a total list of towers erected in the city.

The civic body's initial move to levy tax on these telecom towers met with stiff resistance. A telecom infrastructure provider had even approached the Madras High Court and obtained a stay order about two months ago. However, corporation officials claimed that the stay order was issued for specific legal complaints and the corporation has decided to implement its decision to impose additional tax on the rest of the property owners who have rented out their premises for erecting mobile towers.
"We had initially tried to bring the mobile towers under our tax net and had also issued some notices to building owners but so far it has not been successful. Even though some of the towers are erected in residential buildings it can be taxed since it is used for commercial purposes," said a senior corporation official.

The civic body had passed a resolution last year in its council to impose Rs 30,000 as annual tax from the property owners where mobile towers are erected in the city. The resolution was unanimously passed in the council and some councillors had raised questions about the health hazards caused from the electromagnetic radiations emitted from the towers.

"Our legal wing obtained a stay from Madras high court against Madurai and Coimbatore corporations move to levy tax on some of the mobile towers erected in their limits. So far the corporation had not made any counter move against the stay order,' said R Sathya Gopi, administrative head, Indus Towers Limited. At present, no separate permission is acquired from the civic body before the exercise is conducted though the city corporation had earlier mooted that a special permission should be taken to ensure the structural stability of the building before erecting the tower.

Medical experts in the city claimed that though there have been an extensive study done on the ill effects of radiation from mobile network towers in various countries, a concrete opinion is yet to be formed about the ill effects of radiation
sridhar pasumarthy (Querist) 29 October 2012
Very kind of you to all for rendering your valuable advice.
Guest (Expert) 29 October 2012
You are welcome.

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