The newly elected Dimapur Municipal Council (DMC) has faced mounting allegations, particularly from business organizations, regarding its taxation practices. However, in a press statement released on Sunday, the DMC dismissed claims of promoting syndicates and monopolies as speculative and unwarranted, insisting that there is no issue of “multiple taxations” within its jurisdiction.
On October 11, the Dimapur Chamber of Commerce and Industry (DCCI) accused the DMC of imposing unregulated taxes and fees on items subject to Goods and Services Tax (GST). The DCCI demanded immediate action from the state government, citing a government notification issued on November 16, 2021, which prohibits municipal bodies from collecting any taxes or fees on goods covered by the GST regime.
In its statement, the DCCI emphasized that the DMC’s actions are in direct violation of this government directive, branding these unregulated activities as “illegal and unacceptable.” They warned that if such practices continue in Dimapur, it could set a troubling precedent for other districts in Nagaland. “Public should also be aware as any taxation is directly or indirectly borne by the common citizens,” the DCCI added.
The DCCI highlighted the burden facing the business community, stating that they are caught in a “double jeopardy” due to both the GST regime and the DMC’s additional taxes and fees. “The GST regime is squeezing out a major chunk of business proceeds from the already exhausted and exploited business community, while the municipality has been imposing unregulated taxes and fees,” the statement read.
One specific example cited by the DCCI includes the DMC allegedly collecting substantial amounts as tax from second-hand clothing sales, which are subject to GST. Additionally, the DMC has reportedly been charging ` 1,000 per month from shops and agencies as a “regulation fee.” Furthermore, it levied significant one-time payments on shops selling decorative items in anticipation of the festive season.
The DCCI criticized the DMC for not establishing fixed rates for perishable items, which do not fall under GST. They pointed out the DMC’s practice of charging `500 per Tata Mobile (pick-up truck) carrying tomatoes, and subsequently collecting ` 3 per kilo of tomatoes at the market. Similar practices were noted for other perishable items like potatoes and onions, where taxes are arbitrarily imposed.
In response, the DMC in a statement issued today reiterated its commitment to operate within the legal framework established by the Nagaland Municipal Act, 2023, and the guidelines issued by the state government.
“Allegations suggesting that ULBs promote syndicates and monopolies are speculative and unwarranted,” the DMC stated, adding that it is dedicated to addressing the issue of illegitimate organizations.
The DMC clarified that permits and licenses are carefully reviewed and issued only when necessary to serve the broader interests of local bodies and the public. It urged anyone with concerns about tax practices to report issues directly to the DMC Office rather than taking them to the press, which they claimed creates confusion and undermines the newly installed civic bodies.
“This practice of making sweeping statements in the press defames and disheartens the newly formed ULBs. As mentioned earlier, suggestions are always welcome,” the statement read.
According to the DMC, there are no instances of forceful collection or charging rates higher than prescribed. Also, it maintained that no collection gates have been set up on national, international, or state highways, and no taxes or fees are being levied on GST items. “Taxes are levied only in accordance with Section 124 of the NMA, 2023. This is not intended to generate profit and all collections are ultimately returned to public service,” it added.
The DMC appealed to the public to trust in the processes being implemented following a two-decade dormancy of local bodies, highlighting that improvements will take time and require public cooperation.
“We must understand that there are procedures to be followed and that the betterment of Dimapur is a process and not an overnight affair. Public trust and understanding is vital in reaching our common goal. As such, it is appealed to the citizens not to cast aspersions based on hearsay as utmost efforts are being taken to streamline the system after the long gap,” it stated.
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