BEST to impose 'transport cess' on Mumbaiites

Oct 06, 2013, 12:42 IST | Shashank Rao

In a desperate bid to curtail losses, BEST management approves proposal to impose 'transport cess' on millions of Mumbaiites who pay property tax, forwards plan to BMC for approval

In a bid to keep the Brihanmumbai Electricity Supply and Transport (BEST) afloat away from losses, on Saturday, they are looking at the option of creating a ‘transport cess’ and propose its parent body, the Brihanmumbai Municipal Corporation (BMC) to include it in property tax or any other tax structure applicable to all Mumbaiites. SUNDAY MiD DAY was first to report in its article ‘BEST wants a share of your property tax’ published on July 21, about this proposal being mooted by the BEST, which is being done in a bid to save itself from debts.

For more than 10 years, the BEST’s finances have nose dived, as their balance sheets have been seeing a deficit. File Pic

For more than 10 years, the BEST’s finances have seen a red-mark, as their balance sheets have been seeing a deficit. For years now the electricity supply wing of BEST has been the transport division, which is perennially making losses. For instance in 2013-14, the total deficit ran into Rs 449.06 crore, out of which the transport division bore losses of R748.13 crore. There was a profit of Rs 299.07 crore in the supply division of BEST.

Now as per the proposal made to the BMC, the BEST hopes to recover transport losses through ‘transport cess’ which will be imposed on millions who pay property taxes. BEST currently recovers a paltry amount by including a surcharge on electricity bills sent out to 10 lakh residents who receive electric supply from the undertaking.

The BEST has been cross-subsidising their profit-making electricity division with the loss-making transport wing for years. Transport Division Loss Recovery (TDLR) of Rs 1.54 per unit of power is being charged to the electricity consumers till 2014-15. The situation has worsened to such an extent that BEST has applied for a loan of Rs 1,250 crore from three banks, apart from Rs 800 crore loan from the BMC.

This proposal has been made as consumers residing between Colaba and Mahim/Sion are angry that they are unnecessarily being taxed, even though many of them do not even use BEST buses. “We can recover this component of transport cess either in property tax or octroi,” said OP Gupta, General Manager, BEST Undertaking, adding that the cess is likely to be imposed after 2015-16.  

Go to top