BANGALORE: With the use of Euro III compliant diesel in its buses since April 1, the Bangalore Metropolitan Transport Corporation (BMTC) has been incurring an additional expenditure of Rs. 1.5 lakhs a day, according to Upendra Tripathi, Managing Director of the corporation.

The use of cleaner fuel may bring smiles to the faces of environmentalists, but the BMTC top brass is certainly not smiling. It will have to bear an additional burden of Rs. 5.2 crores a year, at the current level of fuel prices.

The use of low-sulphur diesel reduces emission of sulphur dioxide from 0.5 mg a litre to 0.005 mg a litre. The Centre has made it compulsory for urban transport bodies to use low-sulphur diesel from April 1. The Euro III compliant diesel costs 90 paise more per litre.

Additional burden

The BMTC consumes 58,000 kilo (thousand) litres of diesel a year. Thus the additional burden is Rs. 5.2 crores.

This burden comes at a time when the Centre has enhanced motor vehicle tax from 3 per cent to 5 per cent last year. As a result, the BMTC will be paying Rs. 30 crores for its fleet of 4,400 buses in 2005-06. Last year, it paid Rs. 22 crores. In 2003-04, the BMTC paid Rs. 10 crores as motor vehicles tax for 2,800.

The transport undertakings suffered a blow in the last financial year when sales tax on motor vehicles was increased from 5 per cent to 13 per cent.

Mr. Tripathi urged the Chief Minister, N. Dharam Singh, to restore it to the earlier level at the inauguration of the Shanthingar bus terminus on February 23. The latter assured Mr. Tripathi to consider his request. But the State Budget for 2005-06 was silent on this.

Most of the articles purchased by the BMTC attract 12.5 per cent Value Added Tax (VAT) regime.

Mr. Tripathi said the BMTC pays Rs. 1.44 lakhs as tax on a bus built at a cost of Rs. 2.13 lakh.

At a time when BMTC proposes to transport 40 lakh people a day by 2010 (assuming that the proposed metro rail will carry 8 lakh people a day), moderate tax should be levied on the urban transport system.

To offset the tax burden, the BMTC plans to build commercial complexes in its depots and rent them out. It will earn an additional Rs. 50 crores from this and from advertisements.

"We will use the money to pay the taxes," he Mr. Tripathi added.

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