Southern States - Karnataka

`Presumptive taxes' burden people of Mysore

By Our Staff Correspondent

Mysore May 4. Is the public in Mysore a victim of "presumptive tax", being illegally collected by various service providers? The assumption seems to be true in the light of several glaring examples where the authorities have levied tax, the basis for which has been a presumed increase in the future.

There have been complaints about the way a few gas agencies in Mysore went about collecting additional charges for supplying LPG cylinders to consumers. The "hike" was imposed on the grounds that the Union Finance Minister announced it in the Budget.

But what the gas agencies failed to comprehend was that the increase was to have come into effect from the new financial year, which commences on April 1 every year. Prasad of the Mysore Grahakara Parishat (MGP) said the MGP was flooded with complaints from consumers, and this had been brought to the notice of the Petroleum Advisory Committee.

He pointed out that many dealers in Mysore city withheld the release of LPG cylinders and created an "artificial scarcity" during the first week of March and charged the consumers Rs. 40 extra assuming that the increase was brought in to force with immediate effect.

Other consumer activists pointed out that the gas agencies had information about the impending withdrawal of subsidies to the LPG and hence created an artificial scarcity only to charge Rs. 40 extra to the consumers subsequently.

Another instance of "presumptive tax" is the drive launched by the Karnataka Power Transmission Corporation Limited (KPTCL) to collect three-month minimum deposit (3MMD). The KPTCL has issued notices to consumers demanding difference in the 3MMD, which has emerged due to increase in power tariff over the years. The KPTCL reasoned that collecting 3MMD was necessitated due to an increase in power tariff over the years, and the fact that the existing deposit of consumers did not match the new average, which was based on the current tariff charged by the KPTCL.

However, the Convenor of the Mysore Grahakara Parishat, G.L.Nagaraj, has raised objections against the KPTCL's decision. In a release, he pointed out that these additional deposits for which the KPTCL had already issued notice, became due only when the Karnataka Electricity Regulatory Commission (KERC) approved the rate hike mooted by the KPTCL. However, the KERC had raised numerous questions, which were yet to be satisfactorily answered by the KPTCL.

When the KERC had not taken a final decision on the proposed tariff hike, the KPTCL could not issue notice to consumers and collect the 3 MMD from them, Mr. Nagaraj said.

How the KPTCL could assume that the power tariff hike would be approved, and pass on bills to consumers based on the assumed hike? he asked.

Sources in the KPTCL argued that the 3MMD pertained to the tariff hike already in vogue from 1999. But Mr. Nagaraj contended that many consumers had remitted the amount in the past and hence the new notice received by them amounted to levying fresh cess anticipating another round of increase. The KPTCL had not furnished a clear explanation, he added. The 3MMD should be a one-time collection at the time of drawing fresh connections. It could not be escalated every time there was an increase in power tariff. If the same logic were to be applied to other infrastructure cess, then a person who purchased a site 10 years ago should be made to pay the difference of amount each time there was an escalation in the real estate value, another consumer activist said.

Another case related to collecting taxes based on presumption that it will be approved in future is the property tax being collected by the Mysore City Corporation. Though the self-assessment scheme (SAS) has been put on hold, it is not clear as to what rate should be charged for the present. The MGP expressed fears that presumptive rate increases seemed to have become the order of the day and this had no legal basis. The authorities had failed to clarify and hence it was for the public to raise their voice failing which the moment a price hike was mooted, it would become a reality, Mr. Nagaraj said.

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