GST role in water tariff hike

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The Goods and Services Tax (GST) could force bulk water consumers here to pay a higher tariff with the Public Health Engineering Organisation (PHEO) considering a revision of prices.

The revised tariff would affect the ongoing bulk water supply projects for IIT, Niser and Infocity II. The project executor, fearing cost escalation, requested the government to look into it on a priority basis.

According the executor, the supply project would be commissioned at an approved cost of Rs 187.72 crore. But it will face an escalation after the imposition of 18 per cent GST.

Accordingly, users will also have to incur a higher price in the form of tariff.

“We received the executor’s proposal along with details about the cost escalation and simultaneous rise in user fee. We have asked officials concerned to analyse the escalation and submit a report within a week. We will then prepare the revised cost and user fees,” said a housing and urban development official.

A source said the implementation of GST was likely to increase the project cost by Rs 6 to 9 crore. Since the executor will remain responsible for its maintenance, the cost needs to be recovered from user fees, the sources said.

At present, the city’s bulk water consumers number only three per cent. Once the proposed bulk water supply projects on the city outskirts is finished, institutes such as IIT, Niser, Infocity II and nearby areas would come under the category of such consumers. User fees will be collected based on the water metre’s calculations.

PHEO collects Rs 13.03 per thousand litres of water from bulk water consumers, while the tariff is Rs 3.94 per thousand litres for domestic consumers. Amid the hue and cry of tariff hike for bulk water consumers, PHEO officials refused to comment on any such hike for domestic consumers.

“The housing and urban development department will most likely consider the cost escalation for the bulk water supply project and user fees, but this is unlikely to affect domestic consumers since there are no such projects planned at present. However, the consumers will have to pay an exact user fee after installation of the water metres,” said a senior PHEO official.

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