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Only ST bus passengers Paying 17.5% tax, Private Buses Not...

Bus utility says if tax not reduced, it cannot make fare competitive

It might seem that the state's kindness, in the form of allowing Maharashtra State Road Transport Corporation (MSRTC) to keep as much as 10 per cent of its passenger tax for infrastructural development, to MSRTC might be a welcome move, but the bus utility seems not too happy about it. State Transport (ST) officials say they would rather that the government cut back on the tax to reduce ticket cost to be able to compete with private operators and not allow them to invade its market.

A government resolution issued on July 5 mandates that while the tax percentage remains the same, MSRTC gets to keep the bulk of it and use it for modernisation of bus stands, depots, buying new vehicles, etc. Annually, the MSRTC pays 17.5 per cent passenger tax to the government. However, considering the utility's financial condition, there was a demand to generate capital through the state fund.

Requesting anonymity, a senior MSRTC official told Mirror that the utility's annual revenue is Rs 7-8 thousand crore. "In 2013-14, it was Rs 6,723.54 crore, while passenger tax amounted to Rs 852.93 crore. Last year, it was Rs 7,692 crore and Rs 986 crore respectively. If MSRTC uses its 10 per cent tax, we will then get around Rs 500-600 crore."

MSRTC staffers maintain that the utility's service has been getting affected majorly by private players and state transport bodies of Karnataka and Gujarat, whose fares are more competitive than MSRTC's. Hanumant Tate, general secretary of Maharashtra State Transport Kamgar Sanghatana, said, "We are unable to reduce fares due to passenger tax. From each ticket, we take away Rs 17 as tax. On the other hand, private concerns do not have to pay any such tax and can thus reduce prices, leading people to prefer private buses. We have instead demanded that the tax be reduced by 10 to 12 per cent. If ticket fare is reduced by 10 per cent, our revenues will reduce drastically."

Another senior official from MSRTC's Mumbai office pointed out that Karnataka and Gujarat governments levy only 8 per cent passenger tax. "Their fares are lower than ours. There are other sources to generate capital. However, we cannot interfere in a policy decision."

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