After a long-pending dispute, the MCD and the Delhi Metro Rail Corporation have reached an understanding on the issue of payment of property tax and service tax.

In a meeting between MCD Commissioner and DMRC in March, was decided that DMRC's assets built over MCD land will be divided into three categories and separate rates of service tax will be fixed on that basis, officials said today.

After the meeting, the Delhi Metro has paid MCD a provisional amount of Rs 2.58 crore. Earlier, it had paid Rs 37 lakh to the civic body, they said.

The solution has been arrived at after the two agencies were caught in a long-pending dispute over use of space for commercial activities.

In June last year, the MCD sealed some commercial establishments of DMRC at Inderlok station arguing that it was not getting the fee levied on commercial places.

To resolve the issue, the Lieutenant Governor of Delhi had also held a meeting in January this year.