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Old 6th June 2013, 12:17   #1
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Default Soon, uniform road tax of 6% across all states

Interesting piece of news in ET today. If it does materialize, happy news for automakers and consumers both.

Quote:
Buying big cars across states would be cheaper soon as the Centre is likely to decide uniform "lifetime" road tax for cars, taxis and two-wheelers. The state governments have agreed to fix the tax at floor rate of 6% of the sale price before the value added tax ( VAT). The move is also aimed to discourage buyers to get their vehicles other than their home states that have comparatively lower rate of one-time road tax.

Sources said now road tax for vehicles that cost less than Rs 4 lakh (two-wheelers and small cars) hover around 4%-6% whereas it is between 7% and 9% in case of vehicles valued over Rs 20 lakh, making a net gain of Rs 20,000-40,000.
http://economictimes.indiatimes.com/...w/20455020.cms

Mods : Didn't realize there was already a thread running around road tax. You can delete this one.

Last edited by Nilesh5417 : 6th June 2013 at 12:18.
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Old 6th June 2013, 12:43   #2
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Default Re: Soon, uniform road tax of 6% across all states

I don't think AP would say "yes" to this proposal given the insane 12.5% tax they charge on registrations. They'd lose a lot on taxes if they let it drop to 6%.

This, however, is a step in the right direction towards having vehicles move to different states without having to re-pay tax. They should let the vehicle owner drop an application to a centralized agency which will then work with the RTOs of the two different states and move taxes. The owner shouldn't be liable for anything else after filling in the application. The current process of getting NOC, asking for taxes back from original state, paying them at the new state is very very painful and unnecessary.
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Old 6th June 2013, 12:46   #3
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Default Re: Soon, uniform road tax of 6% across all states

Not just AP, even Karnataka with the highest road tax rate in the country will also oppose such a move as it cut into their tax earnings.

But if it is implemented it will be a welcome move and it will make movement between different states an easier affair.
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Old 6th June 2013, 12:58   #4
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Smile Re: Soon, uniform road tax of 6% across all states

The present registration charges are pure day light robbery, so uniform road tax is a good direction something like the GST. The only worry is the implementation is not going to happen any sooner, atleast not in the next couple of years. Although the article says that state govts have agreed to 6%, there is bound to be delay unless the initiative is fast tracked.
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Old 6th June 2013, 13:17   #5
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Default Re: Soon, uniform road tax of 6% across all states

Quote:
Originally Posted by hellmet View Post
This, however, is a step in the right direction towards having vehicles move to different states without having to re-pay tax.
It is neither expressed, nor implied in the news article that moving across States won't incur additional tax.

In fact, news article seems to indicate otherwise. Quoting verbatim - States have also agreed not
to levy tax on temporary inter-state movement of vehicles for three months


So, seems like if one plans to keep out of state vehicle beyond 3 months, the monstrosity of being forced to pay road tax again would continue regardless.
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Old 6th June 2013, 13:48   #6
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This real good news, Bangaloreans can heave sigh of relief once this is implemented. This is one place where the tax is exorbitantly high and RTOs keep a vigil on "other state" cars. We also need to have a uniform system where cars registered anywhere in India can ply anywhere in India without having to again pay the tax in a different state. A centralised vehicle number also makes sense instead of all state specific ones like MH, KL, KA, TN, AP etc
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Old 6th June 2013, 15:35   #7
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Default Re: Soon, uniform road tax of 6% across all states

A real good move if it gets implemented, but am quiet sure that some of the govts will oppose this move like anything since they'll lose a huge amount of money!
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Old 6th June 2013, 15:37   #8
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Default Re: Soon, uniform road tax of 6% across all states

Praying for this as We the people of Karnataka simply pay more for the Fuel and more road tax(I guess almost double that of Delhi)

Hope this happens immediately
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Old 6th June 2013, 15:45   #9
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Default Re: Soon, uniform road tax of 6% across all states

Now am in a dilemma. Should I delay my new car purchase (which I was anyway doing for the past couple of years owing to finances) till this is implemented in Karnataka? :-)

But then I might have to wait for a very long time.

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Old 6th June 2013, 15:51   #10
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Default Re: Soon, uniform road tax of 6% across all states

AP currently charges 9% for cars and two-wheelers under the Rs. 10 lac bracket, but this is only for the first vehicle. The second vehicle is taxed at 5% more, as is any vehicle with an invoice price over the 10 lac mark.

A welcome move indeed to reduce the tax to 6%. I wonder if this will apply to the 2nd (or later) vehicle though.
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Old 6th June 2013, 16:27   #11
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Default Re: Soon, uniform road tax of 6% across all states

In my opinion this would mostly help the high-end cars. The commoner continues to buy sub 5Lakh cars and it wont affect much to them. But someone who is buying those european cars with more than 20lakh will have good sigh of relief! I think the states who had lower road taxes will no more attract the registrations! We see a lot of "PY" cars in bangalore which will certainly reduce. In any case this is good for customer as people will think of higher end car affordability.

If this is extended to car number portability to other states without paying additional taxes, it would be of great help to freely move anywhere in india for whatsoever time we want But i doubt that will happen soon.
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Old 6th June 2013, 18:57   #12
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Quote:
Originally Posted by shinuak View Post
This real good news, Bangaloreans can heave sigh of relief once this is implemented. This is one place where the tax is exorbitantly high and RTOs keep a vigil on "other state" cars. We also need to have a uniform system where cars registered anywhere in India can ply anywhere in India without having to again pay the tax in a different state. A centralised vehicle number also makes sense instead of all state specific ones like MH, KL, KA, TN, AP etc
An Indian Number plate is far better than this nonsensical state led stuff. The reduced tax is welcome because Karnataka probably has the highest taxes, paid by the public to maintain the most egomaniacal, nasty politicians and MP's, MLA's and whatnot, sustain the highest level of corruption and nurture the status quo on worst infrastructure in the country.

Last edited by shankar.balan : 6th June 2013 at 19:00.
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Old 6th June 2013, 19:11   #13
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Default Re: Soon, uniform road tax of 6% across all states

If this is implemented, i hope users who have already paid the Lifetime Tax be given a refund? I know i have high hopes
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Old 6th June 2013, 19:13   #14
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Default Re: Soon, uniform road tax of 6% across all states

This is an awesome news. Waiting to see the implementation soon as possible. And this would also reduce the used car prices i believe
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Old 6th June 2013, 19:24   #15
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Default Re: Soon, uniform road tax of 6% across all states

Waiting for this to become a reality. We in Karnataka are paying exorbitant amounts to buy a car. 12.4% in AP is nothing compare to ~15%, ~16%, ~18% and ~20% for different tax slab of 0-5L, 5-10L, 10-20L and 20L & beyond, respectively. Karnataka buyers are paying in the tune of 1.5 to 2L extra, if the vehicle cost is between 10-20L, compared to many other states.
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