The Supreme Court in US has ruled that the courts may decide the property tax disputes of New York with foreign governments. Now, the decision may cost India $37 million as Indian government was indulged in a property tax dispute with New York City in 2003.

According to the report, the city had sued the government of India in 2003 when the city administration had launched a drive to collect property tax against the countries that had their UN mission or consulate employees in the buildings in which the city administration had its diplomatic offices.

Justice Clarence Thomas stated in a 7-2 judgment Thursday in the New York City’s case against India’s permanent mission to the United Nations that the US Federal Law does not immunize a foreign sovereign in such cases.

Earlier, India allegedly owed $16.4 million in the year 2003 would have to pay $37 million because of the interest of 18 per cent per year to New York City.

According to the City’s administration, the foreign governments should pay taxes for the space for their employees. New York City’s Mayor Michael Bloomberg has said that the judgment would help ensure that foreign countries pay the taxes in the city.

New York’s corporation counsel Michael Cardozo said after the judgment, that now India and other countries would understand that the city means business. Now, the decision of the US Supreme Court may provoke other governments to take similar reaction on US properties in their countries.

Read