More than ₹75 crore in property tax dues linked to public sector undertakings (PSUs), government departments, and public institutions are set to come under the North City Corporation’s recovery radar, as the corporation has decided to collect tax and revisit long-standing disputes over tax exemptions and payment adjustments. The dues involve agencies including Railways, BESCOM, BWSSB, BMRCL, BMTC, BSNL and defence establishments.

According to corporation officials, civic bodies have struggled to collect property tax from government agencies and PSUs, as many cases were stuck over claims of exemptions, pending clarifications, and disagreements on how the dues should be settled. As a result, several demands remained pending despite repeated follow-ups.

Recovery drive

However, the corporation has now decided to take a stricter approach by asking agencies to pay the property tax dues even if disputes over exemptions, assessments or other claims remain unresolved. Officials said issues relating to adjustments or other claims can be addressed separately, but the tax liability itself must be paid in the meantime.  

Records accessed by The Hindu show that the pending demands span a wide range of public agencies. Among the larger entries are ₹29.6 crore by the Wheel and Axle Factory in Yelahanka, ₹2.66 crore against Air Force quarters in Shettihalli, and ₹1.72 crore against Railway Wheel Factory residential quarters in Yelahanka New Town. The list also includes properties belonging to BMTC, BWSSB, BSNL, police departments, postal authorities, and other government institutions across the city.

The records further show that many of these demands are not recent. Several government residential colonies and institutional properties have pending dues dating back more than a decade, with some entries tracing their last tax payments to 2008-09 and 2009-10. Officials said the duration and nature of the disputes vary from department to department, making recovery difficult.  

North City Corporation Commissioner Pommala Sunil Kumar said that earlier too attempts were made to improve collections from PSUs towards the end of the financial year, but the exercise yielded only partial success.  

He explained that the Railways maintain they are exempt from paying property tax altogether, so they refuse to make payments. On the other hand, agencies like BESCOM, BWSSB, and BMRCL accept that they do owe some amount, but instead of paying in cash, they often suggest settling the dues through “book adjustments” — an internal accounting method where money is adjusted between government bodies instead of actual payments being made.

No book adjustments

However, the corporation has rejected such book adjustment mechanisms in the current approach, Mr. Kumar clarified, insisting on actual tax payments. He added that while such adjustment-based settlements were considered earlier, the present stance is to recover dues directly in monetary terms.

The official further pointed out that the overall projected revenue from PSUs, including single-plot scheme properties and development charges, had been estimated in the budget at around ₹97 crore. However, the actual arrears linked specifically to PSU properties are now appearing higher, with a significant share, more than 90%, coming from disputed or long-pending assessments.