In a bid to get more grants from the Centre for implementing projects to resolve civic issues faced by residents, the Chennai Corporation has started to turn its attention to improving property tax collection from large government buildings to ensure that the target of stipulated 10% annual increase in property tax collection is achieved for Central funds.

Civic officials held a meeting exploring the options pertaining to property tax collection from government buildings. The civic body is already collecting property tax and service charges from government buildings and buildings of government undertakings. However, collecting tax from government agencies has been mired in controversies including disagreements and disputes.

Chennai Corporation has collected property tax from only 7 lakh out of 13.82 lakh assessees including residential, commercial and government buildings by February 22 (Saturday).

It has collected Rs.1756 crore as property tax for the period of April 2024 -March 2025 so far. Even though the collection in the corresponding period was Rs.1398 crore for April 1, 2023 to February 22, 2024, there is scope for improvement in tax collection, say officials.

The civic body still falls short of the target set for increase in collection to be eligible for Central government funds. “We collected around Rs.1800 crore as property tax last year. When compared to the collection last year, GCC has to collect an additional Rs.180 crore by March 31 to be able to get a grant from the Central government,” said an official.

After the Municipal Administration and Water Supply Minister K.N.Nehru spoke about the State government’s decision to do away with practice of using drone survey to increase in property tax revenue, GCC revenue officials in each of the 15 zones are in a bit of predicament as residents have started questioning them about the minister’s announcement.

As the Chennai Corporation would lose a few hundred crores in grants from the Government of India for civic infrastructure projects for residents if it failed to achieve stipulated annual increase in property tax collection, alternatives such as property tax and service charges from buildings of the Government of India, State government and government undertakings have come in the limelight, officials said.

While the departments of the Government of India pay service charges instead of property tax for their buildings, the State government agencies such as MTC and government undertakings pay property tax. However, government entities such as Railways and ICF have appealed against the demand to pay service charges stating that the Corporation should also pay them, pointing to the civic services provided for residents, including the roads used by motorists on their premises for improving connectivity.

The Railways has more than 400 properties including buildings for railway stations, civic officials noted. Many buildings of the Government of India including the Railways and ICF have not been paying service charges to Chennai Corporation as per the order of the Supreme Court.

According to the SC order in the case of Rajkot Municipal Corporation Vs. Union of India, the Central government departments have to pay service charges which will be calculated based on the services provided by the municipal corporation, civic officials said.

The civic body is expected to collect Rs.2700 crore as property tax this year if the residents wholeheartedly participate in the special camps for collection of property tax by March 31, well ahead of the target of 10% increase in property tax collection stipulated for receiving central government funds, said an official.