Property tax notice slapped on Wipro; co asked to pay more than Rs 19 crore

Bangalore: Bangalore civic authorities have sent a property tax notice to Wipro, asking the software major to pay dues of more than Rs 19 crore along with interest or face severe legal measures to recover them.

In response, the New York Stock Exchange-listed firm said it has paid the tax and has sought a meeting with Bruhat Bangalore Mahanagara Palike (BBMP) for a discussion on the issue and has a “strong enough” case in defence.

[caption id=“attachment_593903” align=“alignleft” width=“380”]  The dispute is with regard to its corporate headquarters and facilities at Doddakannelli village. Reuters[/caption]

The dispute is with regard to its corporate headquarters and facilities at Doddakannelli village. The BBMP says the company has to pay tax as calculated at Rs 20 per sq ft. Accordingly, it said in its January 11 notice that Rs 19,28,50,815 is due from 2008-09 to 2012-13 and Wipro is liable to pay the amount along with interest of two per cent per month till date.

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“Please make payment immediately otherwise we are forced to go for other severe measures available under law,” the BBMP notice said. Asked for the response at a press conference, where it announced the third quarter results today, Wipro’s Chief Financial Officer Suresh Senapaty said the company has paid the tax and that the campus is “largely” a Special Economic Zone engaged in Information Technology and software services and has a “lot of people”.

“BBMP has disputed that tax liability and imposed and demanded more money on that,” Senapaty said, adding the Wipro has sought a meeting with the BBMP’s Revenue department for a discussion to come to an “amicable conclusion”.

He held the view that the company’s position on the issue is “strong enough to defend either before the Department, the Government or the Judiciary as the case may be”. Senapaty said the issue would not have any significant impact on the profitability of the company.Wipro later said in a statement that it has paid the requisite property tax with respect to the software facility at Sarjapur (Doddakannelli village).

The facility in the SEZ develops software for global customers and has been established with pre-approvals from the Karnataka as well as the central government, the company said. “However, BBMP has disputed the tax liabilities. In this context, Wipro has sought appropriate remedy from the department,” it said.

“We expect the department to follow the principles of natural justice for final adjudication in the matter. Wipro would seek appropriate judiciary or government intervention if BBMP’s decision is not fair,” it added.

PTI