Fifteenth Kerala Legislative Assembly
Bill No. 168
THE KERALA BUILDING TAX (AMENDMENT) BILL, 2023
©
Kerala Legislature Secretariat
2023
KERALA NIYAMASABHA PRINTING PRESS.
Fifteenth Kerala Legislative Assembly
Bill No. 168
THE KERALA BUILDING TAX (AMENDMENT) BILL, 2023
699/2023.
Fifteenth Kerala Legislative Assembly
Bill No. 168
THE KERALA BUILDING TAX (AMENDMENT) BILL, 2023
A
BILL
further to amend the Kerala Building Tax Act, 1975.
Preamble.― WHEREAS, it is expedient further to amend the Kerala Building
Tax Act, 1975 (7 of 1975) for the purposes hereinafter appearing;
BE it enacted in the Seventy-fourth Year of the Republic of India as
follows:―
1. Short title and commencement.―(1) This Act may be called the Kerala
Building Tax (Amendment) Act, 2023.
(2) It shall come into force on such date as the Government may, by
notification in the Gazette, appoint.
2. Substitution of certain expression by certain other expression.―In the
Kerala Building Tax Act, 1975 (7 of 1975) (hereinafter referred to as the principal Act)
for the words “luxury tax”, wherever they occur the words “additional tax” shall be
substituted.
3. Amendment of section 2.―In section 2 of the principal Act, for explanation
2 to clause (e), the following explanation shall be substituted, namely:―
“Explanation 2.―(i) Where a building consists of different apartments or
flats, as the case may be, owned by different persons, each such apartment or flat,
as the case may be, shall be deemed to be a separate building and the assessment
shall be on the basis of ownership and the plinth area shall be, as may be, specified
in the software/occupancy certificate/tax assessment details, as the case may be,
approved by Local Self Government Institutions.
699/2023.
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(ii) If a builder remains the owner of the whole or part of the building
then he will be liable to pay building tax or additional tax, as the case may be, for
the aggregate plinth area in respect of the flats or apartments, as the case may be,
that are retained by him and if the owner sells away the whole or part of the
building retained by him after the assessment, each part shall be assessed
separately on the basis of ownership for the purpose of additional tax only.
(iii) If a person purchases more than one flat and the buildings that
comprise the flats or apartments, as the case may be, are interconnected with each
other, it shall be considered as single unit and liable to pay onetime tax or
additional tax, on the basis of aggregate plinth area and if the buildings that
comprise the flats or apartments, as the case may be, are not interconnected with
each other, each flat or apartment, as the case may be, shall be assessed
separately.”.
4. Amendment of section 5A.― In section 5A of the principal Act,―
(i) for marginal heading the following shall be substituted, namely:―
“Certain category of residential buildings”;
(ii) for sub-section (1), the following sub-section shall be substituted
namely:―
“(1) Notwithstanding anything contained in this Act, there shall be charged
an additional tax annually at the rate specified in the Schedule II on all residential
buildings having the plinth area of above 278.7 square metres completed on or
after the 1st day of April, 1999.”.
5. Substitution of new section for section 6.― In the principal Act, for section 6,
the following section shall be substituted, namely:―
“6. Determination of plinth area for the purpose of assessment of onetime
building tax or additional tax.―The plinth area of a building for the purpose of
assessment of onetime building tax or additional tax, as the case may be, under this
Act shall be the plinth area of such building as may be specified in the
software/occupancy certificate/tax assessment details, as the case may be,
approved by Local Self Government Institutions.”.
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6. Amendment of section 13.―For sub-section (2) of section 13 of the
principal Act, the following sub-section shall be substituted, namely:―
“(2) The District Collector shall not, suo motu, revise an order under sub-
section (1) if that order has been passed more than one year previously.”.
7. Substitution of new section for section 21.― In the principal Act, for
section 21, the following section shall be substituted, namely:―
“21. Furnishing false statements for assessment.―On further verification,
if it is found that the information provided by the owner in the return under section 7 or
amended return under section 8 filed before the assessing authority for assessment
is false, fifty per cent of the building tax shall be levied as fine.”.
STATEMENT OF OBJECTS AND REASONS
The onetime building tax and luxury tax under the Kerala Building Tax Act,
1975 (7 of 1975) are charged based on the plinth area of the building levied and is
collected by the Revenue Department. But due to the lack of man power in that
Department, thousands of residential and non-residential buildings in the State
remain unassessed which sustain heavy revenue loss to the Government. To avoid
revenue loss and improve the collection of revenue, the Government have decided
to collect the said tax based on the assessment details of Local Self Government
Department which was proposed in the Budget speech 2019-20, an amendment is
required for section 6 to that effect.
The State Government is levying luxury tax annually on residential building
having plinth area more than 278.7 M 2 under this Act as per entry 49 of the State
List in the 7th Schedule to the Constitution of India. But in view of 101 st
amendment to the Constitution which omitted tax on luxuries from entry 62 of the
State List, many writ petitions were filed before the Hon'ble High Court alleging
that the State Government is not empowered to collect luxury tax. The Hon'ble
Advocate General has also opined that it is better to amend the Act suitably so as to
enable the Government to collect the tax in future and from the liability of
refunding the collected tax since the Constitutional amendment.
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Sub-section (2) of section 13 of the Act provides that the District Collector
shall not suo motu revise an order under sub-section (1) if that order has been
passed more than three months previously. As the stipulated time is not sufficient
to revise the order the Government have decided to extend the period to one year.
Section 21 of the Act provides punishment under section 177 of the Indian Penal
Code for furnising false statements in declarations. The Government have decided
to impose fine instead of proceeding under section 177 of the Indian Penal Code.
For the above purposes, the Government have decided to amend the Kerala
Building Tax Act, 1975 suitably.
The Bill seeks to achieve above objects.
FINANCIAL MEMORANDUM
The Bill, if enacted and brought into operation, would not involve any
additional expenditure from the Consolidated Fund of the State.
K. RAJAN.
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EXTRACT FROM THE KERALA BUILDING TAX ACT, 1975
(ACT 7 OF 1975)
** ** ** **
2. Definitions. ― In this Act, unless the context otherwise requires,―
** ** ** **
(e) "building" means a house, out-house, garage, or any other structure, or
part thereof, whether of masonry, bricks, wood, metal or other material, but does
not include any portable shelter or any shed constructed principally of mud,
bamboos, leaves, grass or thatch or a latrine which is not attached to the main
structure.
Explanation 1.― In the case of buildings constructed for providing housing
accommodation for workers and their families residing in plantations, in pursuance
of section 15 of the Plantations Labour Act, 1951 (Central Act 69 of 1951) or
buildings constructed under the Government of India Subsidised Housing Scheme
for industrial workers, each part of a building providing or intended to provide
accommodation for a worker or a worker and his family shall be deemed to be a
separate building.
Explanation 2.― Where a building consists of different apartments or flats
owned by different persons and the cost of construction of the building was met by
all such persons jointly, each such apartment or flat shall be deemed to be a
separate building;
** ** ** **
5A. Charge of luxury tax.― (1) Notwithstanding anything contained in this
Act, there shall be charged a Luxury Tax on the Plinth Area at the rate specified in
Schedule II annually on all residential buildings having a plinth area of above
278.7 Square Metres completed on or after the 1st day of April, 1999.
** ** ** **
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6. Determination of plinth area.―The plinth area of a building for the
purposes of this Act, shall be the plinth area of the building as specified in the plan
approved by the local authority or such other authorities as may be specified by
Government in this behalf and verified by the assessing authority in such manner
as may be prescribed:
Provided that the plinth area of a garage or any other erection or structure
appurtenant to a residential building used for storage of firewood or for any non-
residential purpose shall not be taken into account for determining the plinth area
of that building.
** ** ** **
13. Power of revision of the District Collector.―(1) The District Collector
may, either suo motu or an application by any person agrieved, call for and
examine the record of any order passed by the appellate authority or the assessing
authority and may pass such order in reference thereto as he thinks fit:
** ** ** **
(2) The District Collector shall not suo motu revise an order under sub-
section (1) if that order has been passed more than three months previously.
** ** ** **
21. False statements in declaration.―If any person makes a statement in a
verification mentioned in section 7 or sub-section (2) of section 11 which is false
and which he either knows or believes to be false or does not believe to be true, he
shall be deemed to have committed the offence described in section 177 of the
Indian Penal Code (Central Act 45 of 1860).
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