Is BBMP right in denying tax-payers cheque-paying option?

Coming down strongly on property tax payers whose cheque payments were dishonoured, the Bangalore Bruhat Mahanagara Palike (BBMP) has made it clear that it will not accept cheques for payment of property tax from the financial year 2014-15 onwards. Instead, they can make payments by cash or demand draft. This comes in the wake of the civic agency’s disclosure that more than 8,000 cheques that it had received towards property tax payment had bounced in the fiscal year 2013-14.

BBMP incurs financial burden

Incidentally, about 16 lakh properties come under the purview of the Palike. According to BBMP officials, about 5,000 cheques for property tax payment on an average are dishonoured every year. Sources close to the civic agency had revealed that due to cheque payments not getting honoured, the BBMP’s property tax dues had exceeded Rs 550 crore. It was felt that if this scenario continues, the BBMP would incur heavy loses. Besides, the extra costs involved in issuing notices to defaulters besides fighting cases against them in court would put the agency under tremendous financial burden. To safeguard its interests, there was no alternative before the agency than to reject property tax payments through cheques.

Alternative payment modes

As an alternative to cheque payments, the BBMP Deputy Commissioner encouraged property tax payers to make either cash or demand draft payments. Property owners who had the facility to make online transactions were encouraged to make their payments online. Moreover, he also recommended that property tax payers making their payments for this financial year could avail of a 5 per cent discount if their payment was made by April 30th.

Move to deprive prompt payers

However, this move by the BBMP to impose a blanket ban on property tax payment through cheques cannot be considered as a feasible method to deter defaulters. It would be unfair to deprive a majority of property tax payers of a convenient mode of payment due to the wrong-doings of a minority. Since majority of tax payers do not have online access or are not familiar with making online payments, cheque payments were considered to be much more convenient for a large section of tax payers.

Feasible option before BBMP

Besides, payment by cash involved waiting in long queues which was not feasible for the elderly and for those of whom time was a premium. Moreover, the agency was putting itself in jeopardy of being taken for a ride by defaulters by issuing property tax payment receipts on cheque payments before bank clearance was obtained. Besides, it was also imperative that stringent action was initiated against serial defaulters of cheque payments instead of burdening even the law-abiding tax payers. Hopefully, better sense will prevail on the BBMP decision makers and they will pull short of imposing this citizen-friendly tax payment option and consider measures to take defaulters to task.