Service Apartments May Have To Cough Up More Tax
BBMP Bangalore will propose that Serviced apartments in Bangalore be considered as hotels.
Till now Service apartments in Bangalore are paying taxes like any residential property. If the proposal comes through, the 200-odd serviced apartments in the city may have to cough up more tax. Most service apartments in Bangalore are located in Koramangala, Jayanagar, Indiranagar, HSR Layout, Electronic City, Old Airport Road, Whitefield and areas close to IT hubs.
To be different from hotels, some service apartments offer a wide range of services and amenities, like kitchenettes, internet, cable and Wi-Fi connections, hair dryers, coffee and tea-making machines and more. And the cost of accommodation is 50% lower than that of five-star hotels.
“If the proposal comes through, we will tax them on par with any commercial venture. These apartments function like five-star hotels. They must be considered as hotels and not just residential units,” G Manjunath Raj, chairman of the Tax and Finance Standing Committee said.
“We need to amend the KMC Act 1974 to bring them under this tax net. Whenever international conferences are held in Bangalore, IT companies book these service apartments for delegates’ stay as they are close to IT companies. Many NRIs have pumped money into such service apartments. The owners find it beneficial to rent out an apartment as a service apartment, rather than as a house,” he said.
“So far, the rulebook had nothing like a service apartment, as it is a new concept. Once they are considered commercial centres like hotels and lodges, they must obtain a trade license from BBMP and operate as per commercial norms and pay property tax as per commercial tariff,” I Ramakanth, deputy commissioner (revenue), BBMP, said.
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