Mumbai metro firm moves high court, seeks exemption from payment of civic taxes | mumbai news | Hindustan Times
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Mumbai metro firm moves high court, seeks exemption from payment of civic taxes

Mumbai city news: The MMOPL has made a representation to the state government in view of a September 2011 decision of the BMC that the metro line was a tramway and not entitled to exemption

mumbai Updated: Jul 16, 2017 01:02 IST
Kanchan Chaudhari
The metro operator’s counsel, Venkatesh Dhond, argued that MMOPL was facing acute financial problems having accumulated losses right from its inception.
The metro operator’s counsel, Venkatesh Dhond, argued that MMOPL was facing acute financial problems having accumulated losses right from its inception.(HT)

Faced with a demand of Rs1,702 crore from the Brihanmumbai Municipal Corporation (BMC) towards property taxes and octroi, Mumbai Metro One Private Limited (MMOPL) has approached the Bombay high court seeking exemption from payment of municipal taxes for Metro line-1 connecting Ghatkopar with Versova in Andheri.

The metro operator has sought that the state government orders BMC to exempt the metro line from payment of municipal taxes or decide its representation of December 2016 submitted to the state government to declare a legal status of the metro line.  The MMOPL has made the representation to the state government in view of a September 2011 decision of the BMC that the metro line was a tramway — being a rail-guided mass rapid transit system having a dedicated right of way – and therefore not entitled to exemption from payment of municipal taxes. The civic body has also demanded from the metro operator a total of Rs1,702 crore towards property taxes and octroi payable on material brought in the city for construction of the metro line and penalty for non-payment of the octroi. 

The metro operator’s counsel, Venkatesh Dhond, argued that MMOPL was facing acute financial problems having accumulated losses right from its inception. He said the estimated project cost itself escalated from Rs2,356 crore to Rs4,026 crores and then the metro operator suffered a net loss of Rs277 crore in the first year of operation. The net loss was widened to Rs287 crores in the subsequent financial year and Rs278 crore in the last financial year, thus resulting in an erosion of the entire net worth of the company. 

Dhond said at a time when the company is facing such a financial turmoil and when the government itself is 26% stake-holder in the project, the government is just not deciding its representation – urging the government to declare that the metro line is a “Railway” entitled to exemptions from payment of all types of municipal taxes, and not a tramway, as concluded by the BMC. 

“It can’t be that they just don’t take any decision on our representation eight months after its submission to the government,” Dhond complained and urged the court to either direct the government to decide the representation or issue an order to BMC to exempt it from payment of taxes. 

Additional government pleader Abhay Patki sought time to respond to the petition. Acting on this plea, the bench of justice Anoop Mohta and justice Anuja Prabhudessai adjourned further hearing on the petition till Wednesday.