The Ahmedabad Municipal Corporation (AMC) has come under scrutiny for granting tax exemptions to various amusement park operators despite lacking the authority to do so. This decision, which bypassed the mandatory consent from the standing committee, has resulted in significant revenue losses for the civic body.
The entities benefiting from these tax waivers include Jaldhara Water Park, Kankaria Amusement Park, and the amusement park at Vastrapur Lake. Sources within the AMC have revealed that these tax exemptions have led to crores in lost revenue, a substantial blow to the municipality’s finances. A notable incident in this context occurred in July 2019, when a ride called “Discovery” at Kankaria Amusement Park collapsed, resulting in two fatalities and 25 injuries. Despite this tragic event, the AMC decided to restart all major rides at both Kankaria Amusement Parks 1 and 2. Superstar Amusement Pvt Ltd, the company implicated in the 2019 incident, was allowed to resume operations of these rides.
In 2023, the same company was granted permission to operate Jaldhara Water Park. Subsequently, the standing committee awarded it a Rs. 15.5 crore contract for the renovation of Balvatika. Insiders have disclosed that the AMC has not collected property taxes from this company for several years. On September 24, 2022, the AMC issued a tender for the operation and maintenance of Jaldhara Water Park for a 15-year period, requiring the bidder to repair the facility at an estimated cost of Rs. 4.5 crore. The 10,194 square metre facility was to be leased at Rs. 35 lakh per year, despite the land’s estimated value of around Rs. 100 crore.
In April 2023, AMC awarded the 15-year operation and maintenance contract for the water park to Superstar Amusement Park Pvt Ltd. According to sources, the proposal mentioned a rental fee of Rs. 35 lakh but did not address property tax obligations. Furthermore, the AMC has yet to complete an assessment of the property, resulting in no property tax being collected from the company. Similarly, the operator of the amusement park at Vastrapur Lake has also been granted an unofficial exemption from property tax. This practice of unapproved tax waivers raises serious questions about the governance and financial management within the AMC.
The implications of these actions are significant, not only in terms of lost revenue but also regarding the legality and transparency of the AMC’s decision-making processes. The absence of standing committee approval and the lack of formal assessments highlight potential governance lapses. As the AMC faces mounting scrutiny, there is an urgent need for a thorough review of these tax exemptions to ensure compliance with legal standards and safeguard the financial health of the municipality.
