Established to provide better services than the BBMP, the Bengaluru Solid Waste Management Company (BSWMC) is facing a question of survival.
The board, which started its operations this financial year, has learnt that it will end up losing at least Rs 180 crore a year as Goods and Services Tax (GST) for providing services that are exempted from tax only to the urban local bodies.
As per the GST notification issued in January this year, the exemption for services related to solid waste does not apply to a company, including the BSWMC.
The state government, it is learnt, does not plan to approach the GST Council seeking the exemption. The 18% GST is likely to be the last nail in the coffin of the new company, which had faced multiple hiccups during the formation stage, including the change of government.
A senior official of the BBMP’s solid waste management division said the company was formed with good intentions.
“The plan was to form a company consisting of solid waste management experts and professionals. The company also had a mandate to levy a user fee. We do not know what shape the new company will take if there is no tax exemption.”
After the company was formed, the BBMP’s solid waste management division set up an office in Vasanthnagar.
While the board headed by Additional Chief Secretary Rakesh Singh takes all the decisions, the process of appointing a private professional as full-time CEO has hit a roadblock.
All payments related to solid waste management are currently done by the BBMP itself.
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