It is one of the requirements of JNNURM that citizens should pay user charges for all the municipal services they receive. JNNURM believes that this will "ensure quick service delivery and general improvement in the service delivery link". So Mysore City Corporation is introducing such user fees one by one. The solid waste management cess was introduced last year and now UGD charges are being added to our monthly water bills.
It was recently pointed out that the SAS system of property tax (based on the capital value of the property) is unconstitutional. It seems that even when Mysore City Corporation levies taxes or cesses which are not unconstitutional, it often does it illegally. One such example is the 20% water supply cess it started levying in 2002-3. When it was pointed out that MCC can not be collecting both water tax and the 20% cess, the cess was withdrawn the next year.
Now MCC has started levying "UGD charges" along with the water tax (There is no consistency in the rate, it is being charged at Rs. 10 per month in some areas and has been left to the discretion of the meter reader in other areas). This is also illegal, because there is no provision of the Karnataka Municipal Corporations Act which allows it.
Before 2003, whenever MCC wanted to levy a new tax, it had to pass a resolution to that effect at MCC general meeting, publish the resolution in the official Gazette, obtain objections to the new tax from the public and submit both the resolution and the objections to the State government. The State government had the power to sanction, modify or impose conditions on the resolution. It would then publish its decision in the official Gazette and the tax approved by the State government would be legally in force.
Now MCC has started levying "UGD charges" along with the water tax (There is no consistency in the rate, it is being charged at Rs. 10 per month in some areas and has been left to the discretion of the meter reader in other areas). This is also illegal, because there is no provision of the Karnataka Municipal Corporations Act which allows it.
Before 2003, whenever MCC wanted to levy a new tax, it had to pass a resolution to that effect at MCC general meeting, publish the resolution in the official Gazette, obtain objections to the new tax from the public and submit both the resolution and the objections to the State government. The State government had the power to sanction, modify or impose conditions on the resolution. It would then publish its decision in the official Gazette and the tax approved by the State government would be legally in force.
But in 2003, the State government amended the Karnataka Municipal Corporations Act. One of the stated objectives of the Act was to give Corporations more power and "to dispense with the sanction of the Government before imposing tax". So Sec. 105 of the Act which gave the State givernment power to change Corporation resolutions was deleted. MCC could now impose any tax they wanted without State government interference.
But while deleting Sec. 105 of the Act, the government also removed Sec. 104 of the Act, which defined how Corporation could levy a new tax. It is not clear if this deletion was intentional or accidental, but the upshot of the removal of Sec. 104 is that now MCC has no legal foundation to levy any tax other than those covered explicitly by the Karnataka Municipal Corporations Act. Pre-existing taxes and cesses such as property tax, water tax, advertisement tax, health cess, anti-beggary cess, education cess can continue. Solid waste management cess which was introduced last year is covered explicitly by Sec. 103B and seems to be legal. Sec. 103B also provides for infrastructure tax on vehicles and Sec. 103 provides for an additional stamp duty on property transfers. These taxes can also be legally imposed by MCC. Since UGD charges are not covered explicitly by the Act, its imposition by MCC is clearly illegal.