The BEST Committee has approved the administration’s proposal of levying up to 10 per cent transport cess through property tax to shore up the loss-making utility’s balance sheet
If you own property in Mumbai, be ready to shell out for the loss-making BEST, while paying your property taxes. On Friday, the committee members of Brihanmumbai Electricity Supply and Transport (BEST) approved the administration’s proposal of levying up to 10 per cent transport cess through property tax.
The state utility wants to keep the lights on. File Pic
mid-day had first reported about BEST’s plan of including transport cess in property tax in July 2013 (‘BEST wants a share of Mumbaikars’ property tax’). The proposal mooted by the BEST states that it wants to recover up to 10 per cent as transport cess, which shall be part of the property tax. Annually the BMC recovers around R3,000-4,000 crore as property tax.
Now, with transport cess being a component — for which an amendment has also been made in the Brihanmumbai Metropolitan Corporation Act 1888 — this property tax will go up. This percentage of transport cess could also come down depending on what the BMC and state government decide.
“The proposal will now go to the municipal corporation and then the Maharashtra government for approval,” said Jagdish Patil, general manager, BEST. Initially BEST had proposed a transport cess between 1-3 per cent, which later was recommended to be hiked to 8-10 per cent.
This cess is a replacement for a component called Transport Deficit Loss Recovery (TDLR) that is part of the electricity bills paid by 10 lakh consumers of BEST. The TDLR was implemented – a charge of Rs 1.54 per unit in electricity bills — to recover the losses of the transport division.
Over the last three years, the Undertaking has already recovered more than Rs 1,700 crore through electricity bills, which have a TDLR component. This TDLR will be removed from 1 April 2016, after the Maharashtra Electricity Regulatory Commission (MERC) asked BEST to stop cross-charging 10-lakh electricity consumers to recover losses in its transport division.
Politicising the cess
On Friday, the BEST Committee was caught in a political slugfest with arguments and allegations flying thick and fast between the Shiv Sena/BJP against Congress/ NCP members, and other smaller parties. Congress members said that they have been opposing this proposal for a long time now. “BEST will be recovering R300 crore annually from people through property tax. We will be going to court if the state government approves this transport cess in property tax,” said Ravi Raja, BEST Committee member.
On the other hand, the Sena, which has a majority at the BEST Committee, said that the views of all members were taken.
Finally, after several allegations, the Congress/NCP faction walked out, while the Shiv Sena/BJP faction approved the vote. BEST Chairman Arvind Dudhwadkar of Shiv Sena approved the administration’s proposal for this cess.
Rs 3k crore- 4k crore
The amount the BMC recovers as property tax annually