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Old 15th March 2017, 13:39   #1
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Default Karnataka proposes increasing tax on bikes costing over a lakh

Government of Karnataka, in the budget presented today, has proposed to increase the road tax levied on two wheelers costing upwards of ₹1,00,000 to 18% from the current rate of 12%. This amounts to an increase of 50% .

The current tax structure for registration of two wheelers is as under:

Vehicle costing less than Rs. 50,000 - 10% of the cost of the vehicles

Vehicles costing more than Rs. 50,000 - 12% of the cost of the vehicles

Vehicles that run on electricity - 4% of the cost of the vehicles

This proposed change is similar to the increased rate of taxes already being levied on four wheelers costing more than ₹10,00,000.

The detailed tax structure presently in force in the state of Karnataka can be found in the attached PDF.
Attached Files
File Type: pdf KMVTA 2010.pdf (543.0 KB, 232 views)
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Old 16th March 2017, 09:51   #2
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

Moved to the Motorcycle section - thanks for sharing! Poor Karnataka folk :(, they simply pay too much for their rides.
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Old 16th March 2017, 10:58   #3
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

Tolls -Among the highest in the country-NECE road is the costliest toll road in the country AFAIK.
Fuel - Among the highest in the country
Vehicle road tax - Among the highest in the country
And still Bangalore is 2nd in the list of cities with highest number of vehicles registered.

In a way if this reduces the number of vehicles, its good for the environment. But it hurts when you are buying a new vehicle!

Why does it hurt more is because even after paying so much, we do not get good roads.
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Old 16th March 2017, 12:58   #4
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

18% on all the bikes above ₹1,00,000 seems a little insane. Given that we have so many bikes falling in that category these days, they should have probably kept a cap on the cubic capacity rather than the ex-showroom price. Or even better if they increased the tax slab for bikes costing more than ₹1,50,000 - ₹2,00,000. Even a mere 250cc bike would be above ₹1,00,000 without a doubt.

More reasons to go the "pre-worshipped" way!

Cheers,
R-Six
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Old 16th March 2017, 13:28   #5
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

Petrol is very expensive, road tax is already the highest in the country and the roads are so shockingly terrible. Even brand new fly-overs are so poorly constructed that you have hard bumps passing over the expansion joints and in some cases you can even see the ground below, roads that seem smooth have crazy undulations, speedbreakers are constructed to kill, potholes in the middle of roads. That's what makes things so unfair. One pays the most tax on buying and running vehicles in this state, yet even the roads are not good at all
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Old 16th March 2017, 13:57   #6
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

Hold on. Karnataka is trying to emulate Kerala. For two wheelers alone, Kerala taxes much more than other states.

Here all two wheelers above 2 Lakhs are charged at 20% slab.

Last edited by GTO : 17th March 2017 at 10:19. Reason: Typo
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Old 16th March 2017, 18:11   #7
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

This is excessive and is totally baseless.
What is the logic behind this extra Tax?

Do these bikes weigh so much more that their tyres dig out the 3rd grade roads of Bangalore more?
NO

Do these bikes pollute more?
Not necessarily.

A question to more knowledgeable folks,
Will GST end this non-nonsensical pricing of vehicles and fuel prices as well?
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Old 16th March 2017, 18:18   #8
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

Quote:
Originally Posted by abhishek46 View Post

A question to more knowledgeable folks,
Will GST end this non-nonsensical pricing of vehicles and fuel prices as well?

I do not know about the vehicle pricing, but fuels and alcohol has been kept out of GST as far as I know.
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Old 16th March 2017, 19:00   #9
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

Quote:
Originally Posted by abhishek46 View Post
This is excessive and is totally baseless.
Excessive, yes. Baseless, may not be. Departments of Transport, Excise and Commercial Tax are the cash cows for our dear Government. A six percent increase in tax will go a long way in filling up the coffers.

A friend in the know of things tells me that the excessive number of various Royal Enfield bikes (bullets for common folks) seen on the roads and a marked increase in the number of high end bikes being registered in Bengaluru actually gave Transport Department this idea .

Quote:
Will GST end this non-nonsensical pricing of vehicles and fuel prices as well?
GST will only have an effect on ex-showroom prices. Road taxes being a state subject, they will remain outside the purview of GST, as will the fuel prices.

You can find some more details about the impact of GST on automobile sector here:

http://auto.economictimes.indiatimes...-bill/53541153

OT: What perplexes me is the silence of SIAM on the matter of State Motor Vehicle Taxes. While their website has a section detailing their opinion about the ideal GST structure, they don't have anything to say about MVT. Please have a look:

http://www.siamindia.com/cpage.aspx?...8&pgidtrail=72
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Old 16th March 2017, 19:19   #10
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

Quote:
Originally Posted by dailydriver View Post
What perplexes me is the silence of SIAM on the matter of State Motor Vehicle Taxes. While their website has a section detailing their opinion about the ideal GST structure, they don't have anything to say about MVT.
Simple - consumers don't blame the manufacturers for the sorry state of road taxes, and most consumers don't drop the idea of a car purchase on account of road tax (they might do shenanigans like registering it in lower-tax areas, but that doesn't hit the manufacturer's bottomline), so what does SIAM care?

I alluded to this on the thread about government regulations in the auto sector, pointing out that fuel prices and road tax are two areas where the government actually stands against the notion of a fair price to the public:
Quote:
Originally Posted by arunphilip View Post
The Government Standing up for... the Government
However, there are other areas where the government is the direct beneficiary of certain policies, and in these cases it is the consumer who loses out.

There's been mention of differential pricing for fuel (not to mention how deregulated fuel prices are still pseudo-regulated by increasing the tax component when crude prices drop), and the other contentious topic of states defining taxation on vehicles.

In all these cases, the government is the beneficiary of the increased revenue, so we cannot look at the government as a regulator looking out for the little guy. Likewise, SIAM and auto manufacturers will not really care about these issues as they are a cost passed on to the customer (SIAM does wake up due to bans on large diesel engines, etc.).

<snip>
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Old 16th March 2017, 21:27   #11
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

Quote:
Originally Posted by dailydriver View Post
Excessive, yes. Baseless, may not be. Departments of Transport, Excise and Commercial Tax are the cash cows for our dear Government. A six percent increase in tax will go a long way in filling up the coffers.

A friend in the know of things tells me that the excessive number of various Royal Enfield bikes (bullets for common folks) seen on the roads and a marked increase in the number of high end bikes being registered in Bengaluru actually gave Transport Department this idea .
So you're saying, they are raising taxes not because the expense on road/transport infrastructure is more than taxes collected, but because they can, and people have no choice but to relent ! That's exactly what bad governance is, sons of the soil running government like a fiefdom.

Taxes are supposed to be like a fee paid for services availed. Cross-subsidizing other underperforming or non-performing departments is bad governance ; other than a few departments (such as law enforcement, military, fire & EMS, which are more protective/reactive in nature and do not provide goods or service and hence can't effectively be charged for based on per person use) that cannot be run as independent revenue earning units , similar to corporate BUs , the rest must earn their keep. Subsidizing them is as good as rewarding inefficiency and/or incompetence.


Quote:
Originally Posted by dailydriver View Post
GST will only have an effect on ex-showroom prices. Road taxes being a state subject, they will remain outside the purview of GST, as will the fuel prices.
So GST is old wine in new bottle. Eventually, so many exceptions and exclusions to GST umbrella will be made that GST itself willl be an emaciated old cow. The whole purpose of GST from the citizen's perspective is to achieve uniformity in taxes across the nation, hence the "general".

Reminds me of the proverb: The more things change, the more they stay the same.
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Old 16th March 2017, 23:10   #12
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

These days governments seem to feel that socking the"rich" will make less fortunate/poor people feel happy. And they do! Sadly, only few realise that paying govts has been just like putting money into the black hole! nothing seems to comes out of it (for anyone!).

Next will be the hefty fines collected through implementation of rules & imposition of penalties with 0 tolerance at an increasing number of zones.

Anyway, for now this 6% hike may not make a very very big difference to those paying premium prices for "premium" bikes​, but it's important we understand how the attitude of governments will change policies in the coming years. Let's see.

Last edited by GrammarNazi : 16th March 2017 at 23:25.
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Old 16th March 2017, 23:27   #13
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

A totally eccentric mind, thinking and working at its optimum capacity has devised such a tax structure. A few crores of rupees in extra taxes may be generated. And some thousands may have to be borne extra by the gullible buyer, who apparently is the soft target.

No one who eyes a Rs 1 L plus costing bike will ever change his (or her) decision merely because of the enhanced, higher road tax component.

In such cases other state governments take the cue and introduce similar measures. There was no one time tax (OTT) on motor vehicles prior to 1988. I am sure that the Maharashtra government was the first to introduce such a measure in 1988. Another masterpeice from some "intelligent" Babu ! Prior to the OTT days, each vehicle would be taxed annually. The automobile dealers cried foul over OTT and tried all means saying sales will be affected and that it was illogical. The auto dealers even said that the OTT was a one time collection of a huge amount which if kept in FD, would yeild interest equivalent to the yearly tax that was being charged earlier.But nobody in the government yeilded and it was introduced. Other state governments soon followed. Today this is a norm.

Mean to say that for the Babus this is a very bureaucratic catch to target Rs 1 L plus costing two wheelers and tax them heavily. And this mad decision will take no time to spread all over, as Babus understand nothing other than 4000 mm length, 1200 cc petrol engines, 1500 cc diesel engines and so on. God Bless them and us too !

Last edited by anjan_c2007 : 16th March 2017 at 23:51.
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Old 17th March 2017, 00:43   #14
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

Populist move by the government, as no one who matter will complain. If you ever want to know how to kill a golden goose, just look at what successive governments have done to Karnataka.

Roads terrible condition. Road planned in 1996 is still not complete.
All city lakes are polluted to the extent that it spontaneously combusts.
Traffic doesn't move, can be the worst in the country, based on population density.
Majority of the districts in Karnataka are drought it. Bangalore, be prepared for a tanker filled summer, as cauvery catchment area is also facing a drought.
Erratic power supply. We had almost 30 days without power two seasons ago.
Taxes: Highest tax rates for the country for every item.

Garbage collection: mafia
Tanker: Mafia
Want sand to build a house: mafia
real estate: lol do I need to say more?

Maddy
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Old 17th March 2017, 17:32   #15
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Default Re: Karnataka proposes increasing tax on bikes costing over a lakh

I have a question to the informed. I booked a new bike just last week and I am expecting delivery mid April. So, will the revised tax apply to me?
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