Delhi gold trading hub in Chandni Chowk dazed, confused over municipal tax

Topics Jewellers

A jewellery shop in Chandni Chowk's Kucha Mahajani. The trading hub is battling a tax notice from the municipality.
The entrance to Chandni Chowk's Kucha Mahajani can be easily missed and it reveals nothing about what lies inside: one of the biggest gold trading hubs in Delhi.

The lane and smaller lanes can leave visitors confused. Nowadays, however, Kucha Mahajani's jewellers and bullion merchants are confused about a notice issued by the North Delhi Municipal Corporation informing them that their shops will be sealed on July 2, 2019, if they have not paid it conversion or misuse charges. 

Around 80 properties were surveyed and will now be sealed in the first phase, leaving thousands of traders worried. Some traders say they first heard about the notice on news on June 28, and others claim no notice has been served to them. Traders says no official has informed them about exactly which shops are slated for sealing on the designated date. Even traders who claim to have paid the conversion charge are scrambling to find out whether there is a threat to their shops. 

The notice issued to Kucha Mahajani's traders says that videography of properties was carried out on June 19 and that sealing will start against violators for not depositing the conversion and misuse charges. "The department organised the conversion (charge) camp, with the consultant associations of Kucha Mahajani, but you (traders) have not deposited the requisite conversion/misuse charges till date... The department (has) planned the sealing action on July 2, 2019, against defaulters/shop keepers/owners," it said. 


"I spoke to the authorities. They told me that those people who have not paid conversion charge will have to deposit a one-time conversion charge for 10 years. Those who have already paid the charge for two years, for example, have to pay the charge for the remaining 8 years. After paying the charge, they will not face sealing action," said Pawan Gupta, vice-president of The Bullion and Jewellers Association and the owner of a jewellery shop in Kucha Mahajani. 

After the Delhi Development Authority notified changes in Master Plan Delhi 2021 in July last year, conversion charges became a one-time payment instead of having to be paid once every year. Traders who have paid the annual charges for a period of 10 years are exempt from the burden. 

Shop owners say in 2016 they deposited conversion charges at specially organised camps. However, lack of information and clarity has meant that many of them didn't deposit the required amount and, now, find themselves in a bind with just days to go before their shops are sealed. 

"We have started a camp for collecting the charge. MCD has sent us some of its people for that. Any trader can come to the association office to deposit the charge there and take the receipt," adds Gupta. 

However, things aren't as straight-forward as that. Traders say that the lack of information around the issue has bred mistrust and misgivings.  

"Sealing notice has been issued only in Kucha Mahajani. In all of Chandni Chowk, to our knowledge, it has not been issued in any other market," says Sharad Agarwal, another shop owner from the area. Almost every other trader in Kucha Mahajani has the same question -- why only us?  

Abhishek Agrawal, joint secretary of Bullion and Jewellers Association, says that no one has come from the authority's end to inform Kucha Mahajani's traders about the issue. "Before anything else, they should have started a public-awareness camp to inform us about what sort of revenue it is that the MCD wants to collect from us and based on which order or law," he says, adding, "We feel that this is like extortion."  

One of the reasons for the confusion is that many of the area's traders cite a past order by the Delhi High Court, which had ruled that Kucha Mahajani fell in the special area category and was exempt from such charges. No one trader could explain what this actually meant in application and they claimed neither could the authorities when they were questioned. 

"The courts have said that shops on the ground floor that are there from before 1963, for which there is proof, don't need to deposit conversion charge. Otherwise, all shops on any floor have to deposit the charge," says Pawan Gupta. However, even this has brought little relief. 

"There must be a proof from before 1963 -- an electricity bill or some old receipt. Proof from before 1963 would be very difficult to present. It is not possible," adds Gupta.

All of this means that many of Kucha Mahajani's traders have been left wondering about whether they are liable to pay the charge or not. They also say that statements from the authorities have not helped the situation.

Sharad Agarwal says that the authorities keep changing their statement. According to him, they first said that there would be no sealing for ground floor shops and that the traders didn't need to deposit conversion charge for that. Agarwal claimed that they had also said that there would be no sealing for basement shops either. "Now, they are saying there will be sealing for both ground floor and basement shops," he adds.  

Surrounded by uncertainty, it's the shop-floor staff and workers who earn their livelihood from the jewellery shops that could be the worst-hit by the sealing. "As you can see, every shop has employed about 10-15 people. There are about 3,000 such shops in Kucha Mahajani. If the sealing happens, so many jobs will be lost," says Abhishek Agrawal.

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