Thiruvananthapuram: The latest move by the state government to impose a property tax on privately managed schools and their hostel buildings through the local administrative bodies owes its origin to a proposal initiated some 14 years ago.
The decision to include these institutions in the property tax bracket was made during the tenure of the VS Achuthanandan government, which also made amendments to this effect on the Kerala Panchayati Raj Act and the Kerala Municipality Act on October 7, 2009.
In both the Acts, the sub-sections defining government-approved schools facilitated unaided schools following the Kerala Syllabus, CBSE, and ICSE schools in availing tax exemption.
However, disputes over the imposition of property tax from these institutions prolonged the tax proposal's implementation. The Local Administration Department issued a circular on April 12, 2012, stipulating to impose property taxes on such buildings with effect from January 14, 2011.
The circular also called to determine the tax rates by considering these institutions as taxpayers as of January 14, 2011, when the Kerala Municipality and Kerala Panchayati Raj (property tax, service cess surcharge) rules came into effect.
Although several private schools approached the High Court against the circular, it yielded no results. They, however, managed to obtain a favourable order from the Supreme Court and continued to avail themselves of the tax exemption.
To overcome this, the state government initiated further amendments to the Kerala Panchayati Raj Act and the Kerala Municipality Act by including them in the Finance Bill, which was presented during the previous budget meeting.
The panchayats and municipalities, who are now legally authorised to impose property tax on private school buildings from April 1 onward, have served notices seeking to pay the tax, including the arrears. Most school managements, however, are yet to respond to the notices.
If the government does not intend to change its stance, the move is likely to pave the way for a prolonged legal battle.