Chorus grows for exempting BMTC from paying taxes

Bangalore Metropolitan Transport Corporation (BMTC), which is looking for funds to augment its fleet and make its services affordable, is being forced to shell out over ₹300 crore every year as taxes to the State exchequer. The corporation, which is seeking financial assistance from the State, has urged the government to exempt it from tax.

While its counterparts in other States enjoy tax exemptions and subsidies, the BMTC in 2014–15 paid 13.7% of its revenues as taxes, the highest in the country. A study conducted by World Resources Institute (WRI) has revealed that in 2014–15, the BMTC paid ₹309.63 crore as tax to the government (fuel tax and motor vehicle tax) from its gross revenue of ₹2,257.7 crore, even as the corporation registered a loss of ₹64.9 crore that fiscal.

Pawan Mulukutla, senior manager, WRI, said that while the BMTC had the largest gross revenue transport corporations in New Delhi, Chennai, Mumbai, and Kolkata, it also had the distinction of having the highest tax-to-revenue ratio and highest ticket prices.

In the run-up to the State Budget, the campaign against steel flyover has evolved into demanding better public transport — #BusBhagyaBeku. The demand is to double the fleet and halve the ticket prices, which the BMTC — that has registered losses for three consecutive years — has expressed its helplessness to do so. “Making the BMTC exempt from all taxes — direct and indirect — is the low-hanging fruit for the State government to give a fillip to public transport in the city,” said Srinivas Alavilli of the #BusBhagyaBeku campaign.

Vinay Sreenivasa of Bengaluru Bus Prayanikara Vedike said it was sad to see the government does not spend a single rupee on providing affordable public transport but wants to take from the BMTC’s earnings as taxes.

Tax exemptions and subsidy for transport corporations are not entirely new. The West Bengal government has exempted public transport buses from all direct taxes. In both Telangana and Andhra Pradesh, the State governments pay for most parts of the salaries of these corporations, said Mr. Alavilli.

Transport Minister Ramalinga Reddy said while the BMTC was being treated as a business corporation, it was also expected to run on non-profit routes and also give subsidised bus passes, and both could not go along for long. “In the pre-budget meeting a week ago, we placed a list of demands, including making the BMTC tax-free, which will provide a much-needed buffer,” he said.

While the BMTC is buying 1,650 buses this fiscal year, it does not add up much, as over 1,300 buses are being scrapped this year. However, the corporation has decided to add another 3,000 buses in the coming year and wants the State government to fund half of them. The rest will be run on rent and the BMTC has requested the government to bear the cost.

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Printable version | Mar 1, 2021 11:39:43 PM |

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