The Ghaziabad municipal corporation (GMC) has said that at least 33,061 shops which are being run from residential buildings and houses in the city, and were being charged property tax at residential rates, will now be levied the tax at commercial rates instead, officials aware of the matter said on Saturday.
Property tax rates for commercial establishments are approximately three to six times higher than residential ones.
According to officials, the civic body was seeking ways to increase its tax revenue, and aware that some shops were operating from homes or plots earmarked for residential use, it decided to conduct a survey to find out how many such shops there were across the city. According to the officials, this was their first such survey across the city.
“The survey, which was carried out for the first time, was just completed. It found 33,061 shops operating from houses and paying tax at the residential rate. We will now begin sending them notices to pay at the commercial rate, which is at least three to six times the residential rate,” said Sanjeev Kumar Sinha, corporation chief tax assessment officer.
He added, “Such shops will fall under the mixed-use category because residents use only a portion of their house as a shop. So we will tax only that portion of the house at the commercial rate, which is used to operate a shop, while the rest of the house will continue to be charged at the residential rate.”
According to GMC officials, they have estimated that the 33,061 shops paid ₹6,67,29,006 tax per year, which will rise to ₹31,09,89,420 under the commercial rate. This will generate an additional estimated revenue of ₹24,42,60,414 for the civic body, said officials.
The survey found 7,838 such shops in the city zone, 4,825 in the Kavi Nagar zone, 6,872 in the Vijay Nagar zone, 4,587 in Vasundhara, and 8,939 in the Mohan Nagar zone.
The move has outraged traders.
“Ghaziabad is an old city, and shops sprouted up in residential areas over the years. During the planning stages, the authorities could not provide enough markets or shops, so people resorted to opening shops in parts of their homes. Many of these people are retired or come from lower socioeconomic backgrounds. We will oppose taxation at commercial rates,” said Rajneesh Bansal of the Turab Nagar Vyapar Mandal, an NGO in the city.
Others said that while the corporation requires revenue to carry out its work, it must also consider the impact on small business owners.
“Many people open shops in their homes because they are unemployed or have no way of earning after retirement. This was especially evident during the Covid-19 pandemic when many people lost their jobs. So, such shops should be charged at nominal rates or given a rebate, while those who have opened large showrooms, branded retail outlets, and so on, in their residential property, should be charged at the prevailing rates,” said Rajendra Tyagi, a former councillor from Raj Nagar.
