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Old 29th July 2014, 12:34   #1
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Default Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

The government is considering a plan to exempt private vehicles from paying toll charges for using highways and instead levy a one-time 2% tax on new vehicles.

This is based on a recent study by national highways authority of India (NHAI). The summary of facts that could have prompted the proposal are;
  • Private vehicles generated just 14% of toll revenue.
  • Private vehicles are cause for 50% traffic at toll plazas.
  • Commercial vehicles generated 86% of toll revenue
  • Two options considered to replace the toll structure for private vehicles are;
    • One-time tax of 2% of the value of the vehicle at the time of its registration.
    • Increase the fuel cess to 2% from the existing 1.36, 1.73% (petrol and diesel respectively.)
Details at: http://www.hindustantimes.com/india-...1-1245742.aspx
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Old 29th July 2014, 12:44   #2
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Default re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

This is a brilliant initiative.Point number 2 is 100% true. Most of the traffic at toll plazas is caused by private vehicles. This would definitely be a welcome move.

Also, I don't think people would pay toll equivalent to 2% of their car's ex showroom value (the average car owner), so this move should bring in more revenue than the 14% revenue share that is currently being brought in by private cars.
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Old 29th July 2014, 13:19   #3
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Default re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

It sounds great on paper, but I don't know how practical it will be to implement something like this. After all, toll is collected by various different companies depending on who has the contract for each stretch of highway. Do they have harmonised rates or do they come to some agreement with NHAI on how much they collect, when and by how much they revise the rates and so on.

An alternative to this might be an all-India pre-paid card that one could swipe, or better still a vehicle on-board device that works with a detector at the tollgate like the electronics city elevated road in Bangalore. But again, I suspect it will be difficult to get all the various operators on board to agree and standardise their back-end processes before something like this can be implemented.
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Old 29th July 2014, 13:30   #4
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Default re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

I think increase in fuel cess is the way to go. Taxing only the new cars would leave the vast majority of road users out of the net for a long time. EDIT: Reading the article in the link, private vehicles paid only Rs.1600 crores as toll last FY. Given Maruti alone sells close to a million cars every year, the govt can possibly collect much more money every year by 2% one-time tax than it does now via toll. Leaving the "old" car owners out of the net doesn't really matter at all.

Quote:
Originally Posted by ajitkommini View Post
It sounds great on paper, but I don't know how practical it will be to implement something like this. After all, toll is collected by various different companies depending on who has the contract for each stretch of highway. Do they have harmonised rates or do they come to some agreement with NHAI on how much they collect, when and by how much they revise the rates and so on.
Isn't toll collection just a means for the construction companies to collect the difference between what they spend on the construction and what the govt pays them? If the govt makes money for highway projects via other means and is able to fully compensate the companies for their work, why should there be an issue about rates and rate revisions and such? Of course, the construction "lobby" may not like the idea since most of them probably collect way more money via toll than they are supposed to.

Last edited by StarrySky : 29th July 2014 at 13:54.
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Old 29th July 2014, 13:54   #5
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Default re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

Quote:
Originally Posted by ajitkommini View Post
An alternative to this might be an all-India pre-paid card that one could swipe, or better still a vehicle on-board device that works with a detector at the tollgate like the electronics city elevated road in Bangalore. But again, I suspect it will be difficult to get all the various operators on board to agree and standardise their back-end processes before something like this can be implemented.
It will easier to get all the operators to have common platform. What wont be so easy will be making all users have sufficient balance on their cards / top-up when required. If you want to also have the cash option, then it comes back to the current setup where we keep having ques at the booths
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Old 29th July 2014, 13:55   #6
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Default re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

A different point !
We are forgetting that toll itself is not the right of government. It shows the failure of tax collection and distribution system.What is happening with the taxes we pay ? Is any government machinery held accountable of the application of taxes collected from different forms like road tax,taxes on fuels and surcharge ,on road development.
Argument that toll is necessary to make good roads is contradictory. If only toll needs to be paid abolish all the taxes .Let the public know how much toll is collected and what is the allotment for road development. In Bangalore ,one have to pay a Lifetime road tax of 12 to 15% for each vehicle and what you get? Congested roads back braking gutters. For good roads again you pay toll ? NICE roads are rip offs. They neither provide the comfort nor the speed we are suppose to get.Add more cess ,more levies,more taxes .What a way to go !
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Old 29th July 2014, 14:16   #7
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Default re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

This is outright pointless. Why should a retiree who buys a car for small city runs pay for a highway warrior's junkets?

The only way is to accelerate ETC. This is like the most stupid way to solve toll collection hassles. Instead of finding ways to resolve the jam - they are finding out simpler ways to cop out.

There must be a reason most western countries use electronic toll collection or similar approaches. The whole concept of infrastructure funding must be "user pays" and not anyone under the sun.
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Old 29th July 2014, 14:53   #8
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Default re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

Sorry I do not agree to either of the two proposals. I am already paying through to roof to own a car these days with such gigantic increases in petrol prices and other taxes collected by the government. I have absolutely no inclination to burn my pocket even further to compensate for there incompetency. Atleast in the current scenario I am paying only when I am using a highway.
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Old 29th July 2014, 14:55   #9
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Default re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

A different point of view:

We pay our taxes diligently to the Indian Govt. Its a big chunk from the income and in majority of the Team Bhp Forum members it is between the 20%-30% slab.

What is the Govt. constructively doing with this?

Toll roads are increasing every day and the toll charges keeps on increasing. Point in case, the substantial hike in Pune-Mumbai EW from Rs. 165/- to Rs. 195/- per way.

It would be a good move to collect the Fuel Cess rather than a 2% tax on new cars. For the latter, the realization would be a long time as current owners may take anything between 1-10 years to replace their cars.

@Phmilyman, I do not agree to your point of view about why a retiree should pay for highway junkie?

Its not the question of who pays for whom. This is a benefit for the society and a extension of Govt. civic facilities. Now, if the Govt imposes any other taxes, will the retiree be exempted. No.

So why here. Its the society at large that will benefit .
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Old 29th July 2014, 15:02   #10
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Default re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

Well, suits me really well, but that's because like phamilyman said, I am a highway warrior and whatever the government charged extra, I would recover that within less than a year, but what about people who just use say an Alto or a Celerio for a city run about ? They would feel cheated as their car would hardly ever step out on the highway.

For example: My neighbor has a Wagon R since 3 years now, he took it on the Mumbai Pune Expressway for the first time before some months and thrilled to have touch 100 arounds there. See the point ?
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Old 29th July 2014, 15:16   #11
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Default Re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

I think otherwise. I dont think this is for the benefit of the common man. This is a bad move

There is only a certain percentage of vehicles that are used for long drives and pay toll. It is not that every personal vehicle that is purchase is used for long drives and pays toll.

If the Govt / NHAI is really worried about the traffic jams at the gates, they can have a dedicated RF Toll Tag lane, which can come with a prepaid or a post paid toll charge, like in the US OR they can collect online pre-paid toll with a barcode receipt or a unique number, which can be validated at the toll plaza, similar to movie tickets online. RF Toll Tag is a proven model and is used in all countries like Europe/UK/USA/Gulf etc

Actually, by charging that 2% it would be ensured every vehicle, even though it is not being used for long drives, pays toll and that is significantly higher that what is earned by the toll plaza against private vehicles.

What is the guarantee that all toll plaza will have a dedicated line for private vehicles to zoom past and those lanes will not be hoarded by commercial vehicles?

Also - This is not fool proof. Will the govt pass a law that the vehicle can pass at "Any" toll plaza in the state without paying? Example, if implemented, can i drive thru the Rajiv-Gandhi sea link or the Nhava Seva sea link without paying toll? - Highly unlikely.

Last edited by scopriobharath : 29th July 2014 at 15:17.
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Old 29th July 2014, 15:42   #12
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Default Re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

Quote:
Originally Posted by phamilyman View Post
This is outright pointless. Why should a retiree who buys a car for small city runs pay for a highway warrior's junkets?

The only way is to accelerate ETC. This is like the most stupid way to solve toll collection hassles. Instead of finding ways to resolve the jam - they are finding out simpler ways to cop out.

There must be a reason most western countries use electronic toll collection or similar approaches. The whole concept of infrastructure funding must be "user pays" and not anyone under the sun.


Private vehicles contribute only 14% of the Toll Revenue. Allright. Does it require Rocket Science to determine how much % of Private vehicles USE the Toll Roads in the first place?

It's not about retirees. My second car has done only 13K Kms in 5 Years and has very rarely used a Toll Road (That too, not the NHAI roads but the ones Govt builds within the city to milk us). Now why on earth should a User like me pay an additional one time charge over and above the atrocious Road Tax anyways?
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Old 29th July 2014, 15:45   #13
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Default Re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

I think instead of laying a 2% on the ex-showroom price of the vehicles a fixed charge should be imposed on the cost of the vehicle, like how they charge toll for E.g.: 30 Rs for all cars 50 Rs. for Jeep/SUV/VANS and Rs.80 for Trucks/tempos etc. This would not unnecessarily increase the cost of vehicle and be acceptable as well as there would be equal charges payable for a person buying a Alto or a Octavia which have to pay same toll prices. However the fixed charged would be higher for SUV’s, Vans & other big vehicles which pay higher tolls.
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Old 29th July 2014, 15:53   #14
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Default Re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

This one is a real good move from the Government. This increase in tax should not be reserved only to develop the Highways but also should be used in providing good road inside the cities and towns.
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Old 29th July 2014, 15:58   #15
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Default Re: Proposal: Private vehicles need not pay toll; instead, extra tax on new cars

Apart from the differing opinions, this proposal could be quite hard to implement. Most of the toll roads are operated by private companies, who have contractual rights for the payment. Don't think they will let it go, unless compensated well. The amount of compensation could be the bone of contention for another decade (just look at the case of GST, which involves just central and state governments.)

Last edited by CoolFire : 29th July 2014 at 16:06.
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