What commuters will pay to travel on the upcoming metro lines hinges on whether the civic body is allowed to levy taxes amounting to crores of rupees on account of the network being a tramway, rather than a railway, which is exempt from taxation by state departments.
The Brihanmumbai Municipal Corporation (BMC) had issued notices to the metro authorities earlier this year to recover octroi and taxes, levied for services rendered by the corporation. Notices were also issued under the Maharashtra Increase of Land Revenue and Special Assessment Act for the project’s car depot, as well as the casting yard.
Mumbai Metro One Private Limited (MMOPL), the public-private entity which is constructing the the Versova-Andheri-Ghatkopar (VAG) corridor, responded by approaching the Bombay high court in June to challenge the decision, arguing that the project is a not a tramway as contended, and hence the company is not liable to pay any tax to the civic body.
The court directed the BMC to consider MMOPL’s representations, but the corporation stuck to its stand. “The present project was conceived as a tramway and continues to be a tramway… Undoubtedly, it comes under the Indian Tramways Act,” states additional municipal commissioner (projects) Rajiv Jalota’s order issued on September 22.
MMOPL approached the court again on October 19 to challenge the order. It has contended that the project falls under the Metro Railways (Construction of works) Act, 1978, and Metro Railways Corporation and Maintenance Act, 2002, even though it is registered under the Indian Tramways Act, 1886.
MMOPL’s reasoning is that the Central government, in 2009, amended the acts concerned to extend the provisions under the railways act to the project in order to ensure compliance with certain technical parameters.
Metro rail forms part of the generic expression ‘railways’ under the railways act, which exempts it from paying tax to local authorities, MMOPL’s petition states. “The very nature of the project is metro and not tramway. Merely because it was sanctioned under the tramways act is irrelevant,” the petition adds.
The BMC, however, maintains that a Central government notification of 2009 cannot cover an ongoing project, which was sanctioned by the state government in 2004 for a system which is constructed mainly on the roads of the city.
The court has directed the corporation to file its reply by November 14, giving details of the amounts to be claimed.