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Service tax on RTC will deliver death blow
Travelling in air-conditioned buses of Telangana State Road Transport Corporation would become costlier, thanks to the Centre’s decision to bring the State-owned public transport system under the Service Tax structure. There would be an additional burden of Rs 6 crore annually on RTC, which would be ultimately transferred to the passengers.
Hyderabad: Travelling in air-conditioned buses of Telangana State Road Transport Corporation would become costlier, thanks to the Centre’s decision to bring the State-owned public transport system under the Service Tax structure. There would be an additional burden of Rs 6 crore annually on RTC, which would be ultimately transferred to the passengers.
Union Finance Minister Arun Jaitley, in his budget speech, said all the State-owned public transport systems would be brought within the ambit of the Service Tax. Officials in the corporation said Service Tax would be applicable on the air- conditioned services and the tax would be charged on 40 per cent of the revenues collected from these services.
However, the taxation would be applicable from the month of June and a final decision would be taken by the Centre. According to officials, TSRTC has a fleet of 10,329 buses in 95 depots across the state and collectively they operate 10,733.80 lakh km per annum. The corporation has a fleet of 120 air-conditioned buses and the average revenue per year through these buses is close to Rs 100 crore.
“With additional burden of Service Tax being imposed on the corporation, it is bound to be transferred on the passengers travelling in the RTC buses,” said a senior official. Joint Managing Director G V Ramana Rao said though the RTC buses had been brought within the ambit of Service Tax, the Corporation was yet to get an official communication from the Centre.
Meanwhile, Telangana State RTC Mazdoor Union opposed the Centre’s move to bring RTC under the Service Tax regime. According to TNMU leader M Nageshwar Rao, the State-owned transport corporations of Telangana, Andhra Pradesh, Karnataka, Tamil Nadu and Maharashtra would end up in losses because of the Centre’s decision.
