The proposals, which form part of a set of guidelines circulated to state governments, will take property tax appeals out of the jurisdiction of small causes courts and district courts which are presently empowered to hear such appeals. Any aggrieved property owner can appeal to the appellate authority by depositing in the municipal treaasury an amount equivalent to the old property tax plus 50 per cent of the increased assessment. After hearing the party, the authority can order a refund of the excess assessment with interest, or maintenance of the new rate--depending on what it thinks is fair.

The guidelines also makesuggestions for changes in the levy of building tax (as different from property tax) to the level of municipal services provided. Among other things it will take into account the availability of major services like roads, conservancy, lightining and fire services. It specifies that the total cost of providing such has to be apportioned between residential and commercial properties.

At present, in many states about 25 per cent of the total tax on property is collected from residential property while the remaining 75 per cent comes from non-residential property.

As the proposed property tax reforms aim at establishing a correspondence between services rendered by the municipality and the property tax collected, the guildelines suggest that the owner of a property and/or its occupier (lessee or tenant) should be made jointly or severally liable for the payment of property tax.

State governments should compensate municipalities in cases where exemptions are granted. Property tax exemptions should be kept tothe minimum. Even in the case of tax-exempted properties, only the general tax and not the building tax (which is meant to finance services) should be exempted.

The proposed tax reform guidelines are aimed at minimising the discretionary powers of tax assessors and facilitate self-assessment by owners or occupiers. It is also intended and to ensure equity between various classes of taxpayers and property owners.

While sending these proposals to state governments, the ministry has said that efforts should be made to operationalise the new system as early as possible. According to the ministry's estimates, the assessment of properties based on the new reforms and prepartion of assessement books will take about six months to a year.

According to state government sources in Maharashtra, "the guidelines are not binding on us. The state government will consider all suggestions, excluding the guidelines for lower tax rates and simpler tax structures, he said. The state cannot reduce the revenue accruing fromproperty taxes or make the tax structure simpler due to the complex development structure in Maharashtra, particularly in Mumbai."