Bengaluru development minister KJ George recently said that the government will get back the Rs 120 crore VAT as tax but it has failed to convince the critics.

Finance dept had objected to Bluru steel flyover but it was given a go-aheadImage for Representation
news Steel Flyover Saturday, October 29, 2016 - 11:23

Much before the civil society came on to the streets to protest against the steel flyover, it has been learnt that the state’s finance department had opposed it, according to a report by Rakesh Prakash in The Times of India.

The finance department had raised questions on the financial viability of the project and it had also suggested a re-tender during the inter-ministerial consultations held on the project, the report says.

Besides this, the finance department had also raised doubts about how different factors like Value Added Tax (VAT) were included in the total cost of the project of Rs 1800 crore.

“The Rs 120 crore towards VAT should have already been included in the original scheduled rates and hence, this amount is not justifiable as part of the premium, which means the Rs 120 crore is just plan premium and not towards tax. On the whole, the premium is very high. It may consider renegotiating or re-tendering as per the current scheduled rate,” the finance department said, as per the report.

Bengaluru development minister KJ George recently said that the government will get back the Rs 120 crore VAT as tax but it has failed to convince the critics.

Bengaluru North MP and Union minister DV Sadananda Gowda asked: “Why should the government show Rs 120 crore as VAT when it is coming back to the government? They could have removed VAT and brought down the overall cost of the project, but they have not done that, which gives rise to suspicion.”

On the question of renegotiating with the bidder L&T (joint venture with NCC Limited), the Bengaluru Development Authority (BDA) said it had “already held talks with the lowest bidder at three stages” and “the bidder is no longer interested in renegotiating”.

Administrative officials concluded, “The rationale behind the steel bridge project, that of easing traffic congestion, is well-intentioned. But the way in which the project was being taken forward by the political bosses has given rise to more questions.”

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