The state government has exempted Kochi Metro Rail Limited (KMRL) from payment of property tax being levied by local bodies. The local self government department issued an order exempting KMRL from paying property tax based on a condition in the tripartite agreement which says that the Government shall either exempt KMRL from tax levied by the state government/local bodies or shall reimburse KMRL.

KMRL had filed cases in the High Court against Kochi corporation and other urban local bodies in Ernakulam after demand notice was issued for paying property tax of KMRL buildings. In September 2023, the Ministry of Housing and Urban affairs also demanded that steps shall be taken to exempt KMRL from paying property tax.

KMRL Managing Director also sent a letter to the state government citing that it shall be exempted from paying tax to deal with functional loss and to avoid huge financial liability resulting from payment of tax.

The report of the Comptroller and Auditor General on local self-government institutions submitted to the legislature in July 2024 included buildings under KMRL which were found short-assessed to tax, resulting in loss of revenue to urban local bodies. It was found that KMRL owed Rs 3.35 crores as tax for three buildings for the period between 2017-18 to 2021-22.