Delhi Govt. agrees to pay Rs. 1543 crore VAT for Delhi Metro Phase-III #DelhiGovernance

New Delhi 25/02/2016

Delhi government accepts DMRC proposal that the estimated amount of Rs 1543 Crore VAT for Phase-III project may be paid to it as Interest Free Subordinate Debt long term loan :

The Delhi Cabinet in its meeting on Wednesday evening, chaired by the Chief Minister Mr Arvind Kejriwal, approved the Transport Department’s proposal to provide Rs 1546 crore over the next three financial years to the Delhi Metro Rail Corporation (DMRC) for its Phase-III.

This Rs 1546 crore is the estimated amount of VAT payable by the DMRC for its Phase-III work.

The DMRC had requested that the estimated VAT payable by it for Phase-III may be treated as Interest Free Subordinate Debt long term loan.

It has been decided that Delhi government will pay to the DMRC following amount for the three years beginning this financial year :

2015-16 : Rs 646 crore

2016-17 : Rs 450 crore

2017-18 : Rs 450 crore

TOTAL : Rs 1546 crore


Phase-III of Delhi Metro was approved by an Empowered Group of Ministers (EGoM) on 9/8/2011 and it was decided that state taxes will be reimbursed by the Delhi government.

However, DMRC has pointed out that VAT paid by it till 31/3/2010 in respect of its Phase-II was reimbursed to it only in March 2014 (after a delay of more than four years).

DMRC further stated that the existing system for getting VAT reimbursement for Delhi Metro works is intricate, time consuming and involves lots of paper work.

Therefore the DMRC Board proposed that the VAT amount for Phase-III may be provided to it as a long term loan.

The Delhi government considered the entire proposal and decided that this Rs 1546 crore estimated VAT will be provided to the DMRC over the next three years and it will be repaid by the DMRC after its senior term debt i.e., Japan International Cooperation Agency (JICA) loan is fully paid to the Government of India, in line with the terms approved by the Empowered Group of Ministers.

The amount to be given to the DMRC shall be verified by the Vat Department.

The work for Phase-III was started in 2011-12 and it is expected to be completed by the end of 2017. It will include the Najafgarh, Shiv Vihar and Delhi portion of Bahadurgarh extensions.

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