Bengaluru Volvo users find GST taxing

Categories: GST Recent News, News
No Comments

Every month, Bangalore Metropolitan Transport Corporation (BMTC) pays close to Rs 15 lakh to the Goods and Services Tax (GST) council as the tax that is levied on their Volvo bus fares. This amount comes from the commuters’ pockets, for an additional 5 per cent is added to each Volvo bus ticket fare.This makes commute more expensive by 15 to 20 per cent. Though both Bangalore Metropolitan Transport Corporation and Bangalore Metro Rail Corporation are essential public transport services, the latter is exempt from paying GST. Pravir Bagrodia is one among the 25,000 to 30,000 regular Volvo users, who is forced to shell out more for commuting through public buses. He, for example, pays an extra of Rs 3 on his ticket, owing to GST. “Volvo bus fares are exorbitant to begin with. I commute between Domlur and Whitefield every day, and pay Rs 63, inclusive of GST. At times, I use the airport Volvo as it is easier to find a seat. For the same distance and location, I end up paying Rs 79, due to the Airport Road toll fee,” says Pravir.

He adds, “Many of my colleagues and friends feel discouraged to use the AC buses due to the high fare. They have shifted to cabs, car-pooling and autos, and some have gone back to their cars and bikes.” Even the monthly passes do not seem viable to commuters, as there is GST levied on them too. “The Union Government has been charging Rs 113 GST on the Rs 2,250 AC bus monthly pass, amounting to Rs 2,363. There is no such tax on Metro services though,” Pravir points out. Higher bus fares are indirectly proportional to the number of passengers, which is one of the reasons why lot of Volvos run half-empty. Namratha Nayak, a techie who uses BMTC regularly, says, “I find the Metro more suitable for commute because it is cheaper. I take two buses to work one-way. One from Inorbit Mall to Marathahalli, which costs Rs 40, and another bus from there to Babusabpalya towards Hebbal, which costs Rs 53 including GST,” she shares. If she worked 20 days a month, this would mean Namratha pays GST of Rs 93 per month.

“Mumbai has lower bus fares compared to Bengaluru and the connectivity is also better. BMTC needs to reduce Volvo fares and also ensure better connectivity so we don’t have to keep changing buses. What are we getting in return for paying so much tax?” she asks. ‘Govt should not treat AC buses as a luxury’ Sanjeev Dyamannavar, transport expert from Praja RAAG advocacy group, says, “The government think of the Volvo as a luxury that can be taxed at will. They don’t understand that passengers will be discouraged to use these buses as they will find private transport significantly cheaper.” “Moreover, places like Hosur Road, Tumkur Road and Airport Road have an addition toll fee. A commuter pays Rs 10 to Rs 15 extra —including toll and GST fee — than the original ticket fare. The perception is that Metro is an essential mass transit service, while AC buses are a luxury,” he adds.

Chief traffic manager (operation), Vishwanath KR, says, “We run 625 Volvo buses per day, carrying 25,000 to 30,000 commuters. The revenue from AC buses is Rs 25 to Rs 30 crore per day, of which Rs 15 lakh goes towards GST each month.”“If the tax is waived off, it will bring down our fares and encourage people to use buses. Commuters are totally paying Rs 2 crore approximately as GST for using public transport,” he says, adding that the BMTC has not made an appeal to the Karnataka Government for a tax waiver yet.“It is up to the state government to strongly oppose levying of GST on BMTC services.

Read more at: http://www.newindianexpress.com/cities/bengaluru/2018/sep/27/bengaluru-volvo-users-find-gst-taxing-1877574.html