Hyderabad: The loss-making RTCs of Telangana and Andhra Pradesh will be saddled with an additional Rs 350 crore annual burden due to the 5.6 per cent service tax proposed by Union finance minister Arun Jaitley in the Union Budget last week. Both RTCs would have to hike bus fares to pay tax, if the state governments do not step in to absorb the burden.
TSRTC National Mazdoor Union leader Nageshwar Rao wanted the Centre to roll back the proposal as the corporation is a service-oriented organisation. “If not, the state government should bear the burden,” he said.
The Telangana corporation earns Rs 9 crore a day while the expenditure is Rs 11 crore. APSRTC has a daily expenditure of approximately Rs 13 crore against earnings of Rs 11 crore a day, according to official data. TSRTC joint managing director G.V. Ramana Rao said the corporation was yet to receive communication from the Centre on the proposed service tax, and it would be early to talk about the impact on the corporation.
“Clarity is needed as one version says that service tax would be applicable only on 40 per cent of the total income from air-conditioned buses. Whether buses in other categories are exempt is not clear,” he said. Neither RTC levies a service tax on the sale of tickets to its passengers, officials said. On RTC fares not being reduced along with plunging diesel prices, Mr Ramana Rao told this correspondent that fares are not revised every time the fuel prices go up or come down.
Andhra Pradesh transport department special chief secretary B. Sam Bob said the government was seeking details from the Centre and would take a view after receiving details. Transport department officials said the Union Budget mentioned “service tax on public transport”, which meant that private buses would be brought under the ambit of service tax. They said a clear picture would emerge after the Centre issues guidelines.
