India’s New York mission exempted from payment of property taxes

The Indian mission in New York has been exempted from payment of taxes worth $42.5 million on its property in US.

The US Supreme Court has upheld a Federal Appeals Court decision to exempt taxes on property owned by foreign governments.

In 2010, 2nd US Circuit Court of Appeals in Manhattan upheld the intervention of the State Department under which property owned by foreign governments and UN missions that housed diplomatic staff is exempted from payment of taxes.

A federal district judge had ruled that India, which is in possession of a 26-storey property near the UN owed $ 42.5 million while Mongolia owed $4.4 million.

According to Aaron Stiefel who spoke to PTI, it did not matter what was fair or not, after the Supreme Court's denial of  New York City government's petition yesterday.

Stiefel stressed that the rule of reciprocity applied to the case since US diplomatic buildings in India were not taxed.

"While there is perhaps some unfairness to the City when the federal government retroactively declares property taxes imposed by the City against foreign countries to be null and void, this unfairness inheres in the federal government's unquestioned supremacy in the management of foreign relations," the judges wrote in the judgment.

According to Stiefel, the ruling would have a "financial impact" on the city since more diplomatic buildings in the future would also be exempt from paying tax.