• Is preschool a commercial activity

I have rented a small bunglow in Andheri and run a preschool NOC from thr owner to run the preschool is obtained. But now the BMC states that this is a rental premises and we need to pay commercial tax for the same. Please guide 

How do we prove that this is not a commercial activity
Asked 5 years ago in Property Law
Religion: Hindu

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19 Answers

Running pre school is commercial activity and you need to pay commercial property taxes for the same 

Ajay Sethi
Advocate, Mumbai
99776 Answers
8145 Consultations

1. Yes , running a school is a pure commercial activity.  Therefore the local authority is not wrong if it asks for tax assessed for carrying out commercial tax.

2. You need a separate license for running school.  So apply for it and pay commercial tax.  However due to closure of school during pandemic you can ask for remission in tax.

Devajyoti Barman
Advocate, Kolkata
23653 Answers
537 Consultations

1. Pre-school is a commercial activity and you have pay commercial taxes in accordance with the same.

Shubham Jhajharia
Advocate, Ahmedabad
25513 Answers
179 Consultations

since the purpose of establishing the pre school is earning, resultantly, it can be presumed that it ia a commercial activity 

Suneel Moudgil
Advocate, Panipat
2386 Answers
6 Consultations

1. Pre-School, wherein Public movement and Fees collection shall be evident, is classified as "Commercial Activity" and is liable for commercial property tax, commercial water charges and commercial (LT2) electricity rates. However random Home Tuition without public board display shall not be classified as commercial activity.

2. There is no exception to above, whatsoever.

 

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

Running play school in residential area is a commercial property and for that purpose you have to pay the commercial taxes electricity and any other municipal taxes applicable for this school.

Vimlesh Prasad Mishra
Advocate, Lucknow
6851 Answers
23 Consultations

You are taking fee from children?

YES?

Than it is commercial activity. 

 

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

“There is no provision under the Mumbai municipal corporation Act for such daycares and play schools. It does not come under our ambit and hence we cannot initiate action against them. The centres can choose whether or not they want a certificate from us,” said by shops and establishment department of the BMC.

Ganesh Kadam
Advocate, Pune
13008 Answers
267 Consultations

Dear Sir/Madam,

It is suggested that the said preschool is generally treated as commercial activity but you may say that it is for the charity purpose and you don't earn any profit. 

Ganesh Singh
Advocate, New Delhi
7169 Answers
16 Consultations

Imparting education is not a commercial activity. You will find a number of judgement/court rulings on this proposition.

 

If BMC has served a notice upon you/sought commercial tax under a notice; reply to it.Let this reply be prepared under guidance of a local lawyer. 

Vibhanshu Srivastava
Advocate, Lucknow
9763 Answers
323 Consultations

School not a commercial venture and same is held by High court, Mumbai. Show BMC copy of HC judgment.

Yogendra Singh Rajawat
Advocate, Jaipur
23079 Answers
31 Consultations

- As per rule , Pre-school is not a teaching activity or a commercial activity, and there is no standards, rules established by the government .

- Further , there is not requirement of Licenses under Shops and Establishment act for running a Pre-Schools.

- Further if there is no concept of licensing a pre-school ,  then it cannot come under the commercial activity

- However, if a licence has been issued to you for running the preschool , then it will come under commercial activity. 

Mohammed Shahzad
Advocate, Delhi
15814 Answers
242 Consultations

If there is a financial transactions inlieu of service it is considered as commercial activity.

Swarupananda Neogi
Advocate, Kolkata
2993 Answers
6 Consultations

Generally, no one allow to run a school in a residential house, it is against the law. ... In case if the society allow the other members to run the school more than 20% space in residential, it is also illegal and you can challenge the society's permission. So it's a commercial activity.

If you have been asked to pay commercial tax then you cannot agitate because you are augmenting revenue from this activity.

 

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

yes, it's a commercial activity, you have to pay taxes.

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

You don't need to pay commercial charges as some businesses are allowed even in residential premises without considering same as commercial

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

Yes pre school is a commercial activity and you need to pay commercial tax if you want to continue the school in residential premises.

Mohit Kapoor
Advocate, Rohtak
10686 Answers
7 Consultations

is it your case that you are only using a part of the bungalow for the said activity?

if not, then a preschool activity being a profit making business has to be re-assessed for property tax considering it as commercial

Yusuf Rampurawala
Advocate, Mumbai
7899 Answers
79 Consultations

Well the school is  a commercial activity and it can only be carried out where the hub is located ie market place or a place purchased for this purpose.


You can say that no fee is being taken.

Rahul Mishra
Advocate, Lucknow
14114 Answers
65 Consultations

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