BMC demands Rs. 1,702 crore in penalty, octroi and property tax from Mumbai Metro One

BMC demands Rs. 1,702 crore in penalty, octroi and property tax from Mumbai Metro One
09/08/2017 , by , in News/Views

BMC is seeking Rs. 1,702 crore from Mumbai Metro One for its nonpayment of octroi, penalty and in property tax. The company says it is entitled to exemption under law for being a “railway’’ and has challenged the demand in Bombay high court. The HC on Monday directed the state to decide within three months on a representation by the company last year. Mumbai Metro One runs the only operational metro line in the city, from Versova to Ghatkopar.

Mumbai Metro One Pvt Ltd (MMOPL) said BMC has initiated action to levy property tax worth Rs 115 crore and is claiming Rs 144 crore towards octroi and 10 times that amount towards penalty, despite having details of earlier octroi exemptions it had availed of.

MMOPL counsel Venkatesh Dhond said a representation made to the urban development department for exemption was pending for nine months. He cited urgency and sought orders to the state to instruct BMC to grant the exemption.

But civic counsel Jimmy Pochkhanawalla said the demand for octroi and property taxes was justified. The state’s lawyer, Abhay Patki, said these were “statutory dues’’ on which no unconditional stay can be granted. A bench of Justices Anoop Mohta and Bharti Dangre disposed of the plea by directing the state to decide on representation after hearing BMC.

MMOPL sought to invoke section 520 C of the BMC Act, which empowers the state to direct the civic body to grant exemptions in cases of public projects.

The joint venture Reliance Infrastructure-led company with Mumbai Metropolitan Region Development Authority (MMRDA) having 26% stakes said the state was an “equal stakeholder’’ in a project the government has declared to be a “vital infrastructure project’’. The company said while “operational parameters are at its peak, the financial health is dismal’’. The petition said MMOPL suffered a net loss of Rs 277 crore during the first year of operation between June 2014-March 2015, the losses “widened by Rs 287 crore between April 2015-March 2016 and Rs 74 crore in the first quarter of 2016-17. “The entire net worth has been eroded due to accumulated losses,’’ it said. “If burdened with municipal taxes, it will completely collapse and will be forced to close down operations, which will not be in the interest of stakeholders or general public,’’ it added, stressing that it was “not an attempt at dramatization but a statement of reality.’’ A consequence could be that the one-way fare from Versova to Ghatkopar would shoot up and “create mayhem among travelling public.”

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