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TDS notice slapped on BMRCL

Chitra V. Ramani
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Even as Bangalore Metro Rail Corporation Ltd. (BMRCL) is yet to get over the celebratory mood following the launch of Namma Metro comes the dampener. The Commissionerate of Income Tax here has slapped a notice on BMRCL for failing to deposit tax deducted at source (TDS).

Along with this is the big drop in revenue netted by Namma Metro.

The number of passengers using the metro has come down to 22,000 a day, and consequently revenue has dropped to Rs. 3.5 lakh a day, even while the daily operating expense is around Rs. 4 lakh to Rs. 5 lakh . Between October 20, when Reach 1 was launched, and November 1, an average 52,280 passengers took the metro. During this period, BMRCL managed to net revenue of around Rs. 1.3 crore from around 7.5 lakh people who took the ride.

The tax notice was issued by the commissionerate here around two months ago, after officials found that BMRCL had failed to deposit TDS in the course of procurement of the expensive coaches, a contract costing around Rs. 1,400 crore.

If the Delhi Metro Rail Corporation, the forerunner to Namma Metro, has deposited TDS to the Income Tax Commissionerate in that jurisdiction, then why not the BMRCL, is the contention of the tax authorities here. The BMRCL has since petitioned the Karnataka High Court challenging the notice, which warrants a TDS payment of Rs. 22 crore. A senior BMRCL official, refusing to comment on the issue, said the High Court had ordered stay on the IT department's notice.

P.S. Chhina, Commissioner Income Tax (TDS), told The Hindu that the issue came to light when officials of the Income Tax Department conducted a survey of payments made by BMRCL during the current financial year.

The officials found that BMRCL had not paid TDS on the coach procurement contract with a consortium of companies led by Bharat Earth Movers Ltd. (BEML).

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