Maharashtra: Road tax on private vehicles hiked by 2%

The Government of Maharashtra has approved a hike of 2% on the road tax paid during the one-time vehicle registration process. The hike is applicable on all private vehicles - two-wheelers as well as four-wheelers. As a measure to discourage registration of vehicles outside the state due to the high taxes, the state cabinet has also capped the maximum payable road tax at Rs. 20 lakh.

Prior to this taxation increment, petrol-powered cars attracted a road tax in the range of 9-11% based on the cost of the vehicle, while diesel vehicles attracted 11-13%. The applicable taxes have now been increased to 11-13% for petrol and 13-15% for diesel vehicles. The tax on two-wheelers has been increased from 8-10% to 10-12%. The increased tax rates will further be stacked up by the recently introduced 2% road safety cess.

This increase in road tax comes on the backdrop of the introduction of the Goods and Services Tax (GST) in the country from July 1, 2017. The state government claims that it will be losing around Rs. 700 crore as revenue from octroi and local body tax (LBT) on vehicles, as the two have been abolished. In order to compensate for this loss, the road tax rates have been hiked. The government is expecting to generate an annual revenue of Rs. 750 crore with the hike.

Source: ET Auto