HUDA nod in 2013 to give ad tax exemption to Metro caused Rs 150-crore loss to Haryana
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An unusual proposal from Haryana Urban Development Authority (HUDA) with the “approval” from its then Chairman and former CM Bhupinder Singh Hooda prevented Municipal Corporation of Gurgoan from collecting any advertisement tax from Rapid Metro Rail Gurgoan Limited (RMGL) since 2013, causing the state a loss of about 150 crore, an RTI response has revealed.
The response from the Municipal Corporation to the RTI request of information activist Harinder Dhingra has revealed that HUDA had, in 2013, proposed that the state advertisement policy be amended to provide exemption to the private company, which built and operates the rail system, from paying any advertisement taxes to the Municipal Corporation for five years for which it “eventually obtained the approval of CM-cum-Chairman, HUDA on 11.3.2013.”
The matter was later referred to Commissioner of the Municipal Corporation, who following a recommendation from a committee passed an order giving approval to the proposal. “In reference to the approval accorded by the Haryana government conveyed via Chief Administrator, HUDA… MCG has no objection for the display of advertisements on your assets…,” reads a document given to the RTI activist as part of the reply.
The document specifically mentions that the committee recommended the approval for the proposal after the HUDA letter said that the Chief Minister himself has approved the exemption to RMGL on the pattern of Delhi Metro from paying taxes/charges/fee on advertisement being put on Metro assets for five years.
However, in the same document, the Department of Urban Local Bodies has said the letter from HUDA was “erroneously concluded” by the Commissioner as approval, and the communication was not even addressed to the officer. “A mere proposal initiated by a PSU (HUDA) seeking the approval of its Chairman, who also happened to be the Chief Minister, in its internal noting, cannot, by any stretch of imagination, be taken as approval of Government,” reads the document, adding that the authorisation “purported” to have been granted by the letter were in violation of Haryana Municipal Corporation Act and the state’s advertisement policy.
In response to the RTI question on the details of permission for outdoor advertising granted by the Municipal Corporation to RMGL, the MC has replied, “No permission has been granted by Municipal Corporation of Gurugram. Only consent has been given.”
The Urban Local Bodies department had later issued a show-cause notice to the RMGL asking it to explain why the “seemingly windfall gain of about Rs 30 crore per annum to it outside the provisions of their contracts…. should not be discontinued.” The company has challenged the show-cause notice in Punjab and Haryana High Court following which the court ordered it to furnish a bank guarantee for an amount of Rs 1.5 crore and surety of Rs 30 crore while ordering a stay on any attempts to remove the advertisements. The case which started in 2015 will come up for hearing on July 18.
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