[dZired]

The Government of Andhra Pradesh has announced that buyers of Isuzu vehicles will be exempted from payment of Motor Vehicle Tax in the state. This exemption will cover all Isuzu vehicles purchased in Andhra Pradesh from 18th Nov 2016 till 31st March 2021.

Isuzu Motors has an automobile manufacturing plant in Sri City, Andhra Pradesh, which produces all its vehicles sold in the country. The decision to exempt Motor Vehicle Tax on Isuzu vehicles is being seen as a step to motivate other manufacturers to set up their production facilities in the state.

According to the government notification, the Isuzu D-MAX V-Cross and other upcoming passenger vehicles from the automaker will get lifetime tax exemption. On the other hand, commercial customers buying the D-MAX S-CAB and Regular Cab variants will get an exemption from paying the quarterly road taxes currently applicable.

Isuzu has dealerships in 3 cities of Andhra Pradesh - Vishakhapatnam, Rajahmundry and Tirupati. The company's Sri City plant has an annual capacity of 50,000 units that can be scaled up to 1,20,000 units in the future.

Link to Team-BHP News

[ptushar]

Can governments do this? I understand that governments try hard to get investment in their states. In that case, can a government also raise taxes for vehicles which are not produced in that state?

On a side note, the Isuzu looks awesome.

[car_crazy1400]

IIRC, UP government had also abolished sales tax for vehicles manufactured in UP, being sold in UP.like Daewoo and Honda Cars made at Greater Noida.

It was a tax holiday given as an incentive to set up industry.

[vamsi.kona]

Originally Posted by ptushar

Can governments do this? I understand that governments try hard to get investment in their states. In that case, can a government also raise taxes for vehicles which are not produced in that state?

On a side note, the Isuzu looks awesome.

I believe this may have something to do with the AP Re-organisation act. While the special category status was not provided for in the act, the then PM Mr. Man Mohan singh promised the status the next day. The present government, while not giving special category status, did provide some concessions. Not sure if this is among those.

[zulfi hansi]

Does this mean that the prices of these cars will come down considerably, pan India or at least in AP? Can one buy it in AP and then register it in other states that way saving big money?

[rkg]

Originally Posted by zulfi hansi

Does this mean that the prices of these cars will come down considerably, pan India or at least in AP? Can one buy it in AP and then register it in other states that way saving big money?

If you buy it in AP and register in another state , you have pay not only road tax but also sales tax of respective state where registration is done( especially in South India).

There will be no change in the ex showroom price of the vehicle anywhere in India or AP. Only road tax charged during car registration in AP, is waived. This road tax is around 18-19% of Ex showroom price in AP

[stanjohn123]

Wow. That's a superb move. Why wouldn't all of India do this as a whole to other manufactures who manufacture cars within the country. This will surely boost sales and same time help setup more manufacturing plants in the country.

[avisidhu]

So basically one could expect an unusually high number of AP registered Isuzus going forward. Party time for all agents outside the RTO offices in AP who will help get these registered at fake addresses.

I wouldn't mind if this helps generates more sales though; the V Cross is one of the very few head turners on our roads (beats even those costing 5 times)

But seriously, high time each such silliness is done away with and we have one On road price for any vehicle, across the nation.

[Samurai]

Can we expect Karnataka Government to exempt LTT on Toyota vehicles? Not really, considering how hard Karnataka government milks the road tax.

[drmohitg]

Interesting move. But the loss of revenue is only going to be made up by increasing the taxes somewhere else.

But it would be really interesting to see if the sales pick up based on this.

Also can the rival manufactures challenge this in court? I have a feeling that this can be interpreted as the state advocating for a certain brand.

[cooldude1988765]

Originally Posted by ptushar

Can governments do this?

As far as I understand road tax is strictly governed only by the respective state.
The central government has no share in these taxes.

A particular state is free to set its road tax.
I am not aware whether it is legal for a state to charge differential road tax based on the brand though.

@vamsi.kona I don't think this has anything to do with the reorganisation act nor any special status.

EDIT: Essentially this will benefit all Telangana residents as well. Cars sporting AP numbers are free to ply in both states till 2024. MU-X might be a steal when launched. Could cost nearly the same as in Delhi/Pondicherry etc.

[srishiva]

Usually govts do these kind of things on other taxes like excise duty etc basically favouring the company (Thailand is luring Indian companies !)

In this case, its the customers getting the sops with indirect benefit to company