DJB exempted from service tax
6 July 2012 12:49 AM GMT
In a major triumph for Delhi Jal Board [DJB] and Delhi government, all services and operations aimed at providing drinking water supply, water treatment and sewerage treatment or disposal have been included in the negative list of services exempt from service tax that has recently been notified by the Department of Revenue, Government of India and has come into effect from 1 July 2012.
The exemption will result in huge tax savings of around 60 crores per year for DJB and these savings can now be ploughed back into improving its service delivery and operational capacity. This is the outcome of persistent efforts made by the top management of DJB, with the unstinted support of the Delhi government, to convince the Department of Revenue about the need to widen the ambit of the list beyond services provided to the government or any local authority and include operations undertaken by statutory bodies like DJB, Hyderabad metropolitan water supply and sewerage Board [MWSSB], Bangalore Water Supply and Sewerage Board [BWSSB] and so on.
Moreover, the specific inclusion of the term ‘operations’, which includes erection, construction, maintenance, repair, alteration, renovation and restoration, will facilitate the evaluation of bids made by contractors based on the lowest life cycle cost.
This will allow DJB and other water and sewer utilities to undertake integrated construction and operation and maintenance projects, thereby improving the quality of assets created. Other water utilities throughout the country can also now benefit from the exemption, which will result in a very significant cumulative saving of public money and lower cost of supply for consumers.
The exemption will result in huge tax savings of around 60 crores per year for DJB and these savings can now be ploughed back into improving its service delivery and operational capacity. This is the outcome of persistent efforts made by the top management of DJB, with the unstinted support of the Delhi government, to convince the Department of Revenue about the need to widen the ambit of the list beyond services provided to the government or any local authority and include operations undertaken by statutory bodies like DJB, Hyderabad metropolitan water supply and sewerage Board [MWSSB], Bangalore Water Supply and Sewerage Board [BWSSB] and so on.
Moreover, the specific inclusion of the term ‘operations’, which includes erection, construction, maintenance, repair, alteration, renovation and restoration, will facilitate the evaluation of bids made by contractors based on the lowest life cycle cost.
This will allow DJB and other water and sewer utilities to undertake integrated construction and operation and maintenance projects, thereby improving the quality of assets created. Other water utilities throughout the country can also now benefit from the exemption, which will result in a very significant cumulative saving of public money and lower cost of supply for consumers.
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