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Old 2nd September 2012, 12:25   #1
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Unhappy West Bengal announces lifetime tax on cars

West Bengal has announced life time tax on the cars which until now were subjected to one time tax which I guess was to be renewed after a specific period. The Life time tax option will be now available to new car buyers as well as the existing registered cars.

However the rates for the life time tax aren't attractive for the car buyers who would still prefer the One time tax. The life time tax rates will depend on the cubic capacity of the car. The Life time tax option will be effected from Sept 3 and is applicable for 2,4 wheelers and omni vans (upto 14 seaters) and is not applicable for vehicles classified as transport vehicles.

The Life time tax rates are as follows:
Upto 80 cc: 6.5% of vehicle cost or Rs 1800 (whichever is higher)
Between 80 and 160 cc: 9% of vehicle cost or Rs 3600 (whichever is higher)
More than 160 cc: 10% of vehicle cost or Rs 5800 (whichever is higher)
Upto 900 cc: 10% of vehicle cost or Rs 40000
5.5% of Vehicle cost or Rs 17000 (One time for 5 years)
Between 900 & 1490 cc: 10% of vehicle cost or Rs 55000
5.5% of Vehicle cost or Rs 25000 (One time for 5 years)
Between 1490 & 2000 cc: 10% of vehicle cost or Rs 80000
5.5% of Vehicle cost or Rs 35000 (One time for 5 years)
More than 2000 cc: 10% of vehicle cost or Rs 100000
5.5% of Vehicle cost or Rs 45000 (One time for 5 years)

Link below gives the rates.
http://economictimes.indiatimes.com/...w/16173560.cms
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Old 2nd September 2012, 12:42   #2
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Default re: West Bengal announces lifetime tax on cars

My first reaction was a dismissive "one can't expect anything better from Mamata " . However when i compared it to the tax rates {+ octroi in Mumbai} in Maharashtra as well as places like Bangalore and Hyd I figured that this is a collective loot where rates are hovering in a zone.
Its just so disappointing to see that when our economic growth is stalling, all these stupid policy makers are in a rush to ensure that consumption is further choked out
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Old 2nd September 2012, 13:04   #3
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Default re: West Bengal announces lifetime tax on cars

Quote:
Originally Posted by souravc View Post
My first reaction was a dismissive "one can't expect anything better from Mamata " . However when i compared it to the tax rates {+ octroi in Mumbai} in Maharashtra as well as places like Bangalore and Hyd I figured that this is a collective loot where rates are hovering in a zone.
Its just so disappointing to see that when our economic growth is stalling, all these stupid policy makers are in a rush to ensure that consumption is further choked out
From what I understand this is an additional scheme and does not phase out the earlier scheme of paying road taxes for the vehicle every 5 years. The earlier scheme still seems to be in its place where one can choose to pay road taxes for every 5 years at the existing rates which has not been tinkered yet. If a owner chooses to pay a lifetime tax then they can go in for the new scheme since it is optional. It is not that harmful as critics have tried to make it out to be otherwise there would have been a lot of howling here from the local car dealers.
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Old 2nd September 2012, 13:32   #4
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Default re: West Bengal announces lifetime tax on cars

Its sad to see unscientific methods being used to gauge who pays how much road tax. There are only three parameters that really decide who uses up more resources:
  1. Area occupied by the vehicle on the ground (max length x max breadth)
  2. Pollution caused by the vehicle (under mixed conditions) per unit distance
  3. Total distance travelled by the vehicle on road
The last cannot be determined without leaving room for manipulation. But the first two are parameters which are the only things that should ever matter.
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Old 2nd September 2012, 13:40   #5
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Default re: West Bengal announces lifetime tax on cars

Going by the report, I too understand that it is an additional option, which seem to be good because the customer can choose. Further, the tax seems literally life-time, unlike in Kerala where a lifetime tax means 15 years. Moreover, if the owner plans to keep the vehicle for very long, the additional 30k (in case of a 1000cc) seems fine and he can enjoy using the vehicle tax free from the 12th year. The owner escapes any steep increase in future tax rates too.

But I doubt how many takers will be there for it.
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Old 2nd September 2012, 14:02   #6
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Default re: West Bengal announces lifetime tax on cars

I understand that this entire exercise is to substantially enhance the tax kitty of the Govt of WB.
Keeping the above premise in mind, Govt of WB should have done away with the 5-year option as this will inevitably skew the tax collection towards 5-year period and defeat the purpose of a 15-year (lifetime tax).

in fact the lifetime tax (applicable in almost all states of India) is better as one does not have to worry about paying every year , hence protected from inflationary trends. Also during the resale of your vehicle you can always ask for a slightly higher price keeping in mind the tax that one has already paid.

Hop the WB Govt does something constructive with all the extra monies generated.
Also hope that this does not lead to any "creative accounting" on part of the dealership community in "under-invoicing vehicles" .
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Old 2nd September 2012, 15:10   #7
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Default re: West Bengal announces lifetime tax on cars

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Originally Posted by arjab View Post
Also hope that this does not lead to any "creative accounting" on part of the dealership community in "under-invoicing vehicles" .
Quite a possibility as the dealers can show the price of higher model vehicles as the base model and add the extras as add-ons. That would be quite a savings.
My feeling is, with both the tax options remaining, most will go for the five-year scheme as most new owners don't plan to keep their cars for 15 years or more. The basic premises of the one-time tax is hence lost.
Previously, (since 2003) taxes were paid in slabs of 5 years for the first two times, after which taxes had to be paid on a yearly basis.
I believe, there has also been some change in the cases of failed taxes. Instead of 100% fine for failed taxes, it has come down to 25%.
I was one the last persons to have paid road-tax on the previous scheme for my Toyota Liva which was delivered last Tuesday. Would have preferred the one-time tax for my peace of mind.

Last edited by subratasenn : 2nd September 2012 at 15:13.
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Old 2nd September 2012, 19:31   #8
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Default re: West Bengal announces lifetime tax on cars

I dont understand why such a big issue is being made out of this. Its an option. Take it or leave it. Want to keep the vehicle for a longer period of time go for Life time tax or else pay tax every 5 years.
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Old 2nd September 2012, 19:41   #9
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Default re: West Bengal announces lifetime tax on cars

Quote:
Originally Posted by Pancham View Post
I dont understand why such a big issue is being made out of this. Its an option. Take it or leave it. Want to keep the vehicle for a longer period of time go for Life time tax or else pay tax every 5 years.
+1. No body is forcing you to pay the life time tax, although the rest of the country does follow that. I would consider this as a good option since many people who would want to keep there vehicles for long would now not have to worry about paying tax again and again. Rather pay it once upfront.
Don't understand the hue and cry being made out. And how does it fill the govt's kitty? First of all its not complulsory and secondlythe govt would anyways get the tax amount in installments or otherwise.
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Old 3rd September 2012, 11:08   #10
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Default re: West Bengal announces lifetime tax on cars

We also need to look at the fact that the % is lower than the likes of Karnataka/AP - I find the tax rate in Karnataka to be unreasonably high!
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Old 3rd September 2012, 12:08   #11
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Default re: West Bengal announces lifetime tax on cars

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Originally Posted by Tats07 View Post
We also need to look at the fact that the % is lower than the likes of Karnataka/AP - I find the tax rate in Karnataka to be unreasonably high!
Yep KA leads the pack in just about every tax there is!!! 15.54pc of total cost for Road tax!! Think this move by WB is quite reasonable and shouldnt be made a big deal of!
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Old 3rd September 2012, 12:38   #12
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Default re: West Bengal announces lifetime tax on cars

Quote:
Originally Posted by Pancham View Post
I dont understand why such a big issue is being made out of this. Its an option. Take it or leave it. Want to keep the vehicle for a longer period of time go for Life time tax or else pay tax every 5 years.
Yes, this is an option as of now. But this may not last. WB introduced the 5 yearly tax system in 2001, before that road tax had to be paid on a yearly basis. People had the option of going in for either yearly or five-yearly till 2003, after which the yearly Road Tax thing was withdrawn. So, you never know how long this dual system of 5-year tax and one-time tax is going to last.
Incidentally, West Bengal still has a system of paying yearly road-tax, but that's for vehicles more than 10 years old.
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Old 3rd September 2012, 16:37   #13
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Default Re: West Bengal announces lifetime tax on cars

From what I understood, the 1-time 5 year option is not exactly what it was earlier. The rates for the 5 year option has been hiked a bit. I'm not sure of the exact %.

So for example the City has a 5 year registration of around 57K. If I recall correctly this was in the 40's earlier.
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Old 4th September 2012, 12:24   #14
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Default Re: West Bengal announces lifetime tax on cars

My dealer has charged me a tentative amount of Rs 28,000 (as quoted earlier) for the T-Jet registration for 5 years' tax; he said it might be a bit more or less. He thinks it might be 25k for now ; have to wait and watch Further, though the system is "online," the RTO's office apparently has not installed the software into their PCs yet!

With the vehicles piled up now pending registration, seems we new car buyers have to wait till we get our registration.
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Old 5th September 2012, 15:30   #15
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Default Re: West Bengal announces lifetime tax on cars

Back-to-back posts after a day, but yes, the tax slab has gone up. Where I was earlier quoted 28K, I will now end up paying 52K (5.5% of car price)
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