Uniform 12 pc road tax to make cars cheaper in Mumbai but dearer in Delhi

Nikita Vashisht

Moneycontrol News

Buying a vehicle in states like Delhi could soon become expensive as transport ministry has suggested the highest tax of 12 percent as road tax under “one nation-one tax” proposal.

Centre has pitched three tax brackets corresponding to price of the vehicle to be levied as road tax. Vehicles below Rs 10 lakh will fall under 8 percent tax bracket, those between Rs 10 to Rs 20 lakh will attract 10 percent tax and those buying car worth more than Rs 20 lakh will pay tax of 12 percent.

Group of Ministers on transport, in April, suggested that a uniform road tax across all the states in the country should be charged in order to contain tax evasion by people.

“Uniform tax rate will put a check on people registering their vehicles in low tax rate states and running them in other states,” the statement by the road ministry said.

Presently, Rs 305 a year is paid by a commercial passenger vehicle driver in Delhi carrying utmost two passengers, while Rs 1,850 (plus Rs 280 per person above 18) a year is paid by the CV driver carrying more than 18 persons.

The rates are Rs 665 a year for commercial freight vehicle with a capacity of less than a tonne and Rs 3,790 (plus Rs 470 per tonne above 10) a year for a vehicle with capacity of more than 10 tonne.

Private cars worth less than Rs six lakh attract road tax of four percent (petrol) and five percent (diesel) in Delhi. The rate goes up to seven percent (petrol) and 8.75 percent (diesel) for cars between Rs six to Rs 10 lakh. A road tax of 10 percent (petrol) and 12.5 percent (diesel) is charged for cars above Rs 10 lakh in the national capital.

The new tax rates, however, will be a breather for southern states like Karnataka and Maharashtra.

Bengaluru levies 10 percent road tax on two wheelers below Rs 50,000 and 12 percent for two wheelers above Rs 50,000. Private cars bought under Rs five lakh attract 13 percent road tax and cars above Rs 20 lakh attract 20 percent road tax.

For Mumbai, Rs 160 is paid annually by commercial passenger vehicle carrying utmost two passengers. The amount is Rs 600 for vehicles carrying six passengers under the same category.

A road tax of seven percent (CNG), 11 percent (petrol) and 13 percent (diesel) is levied in Mumbai on private cars bought below Rs 10 lakh. Cars above Rs 20 lakh attract road tax of 13 percent (petrol) and 15 percent (diesel).

One nation-One tax was proposed on the lines of goods and services tax which is levied as a single indirect tax for all goods and services across country.

These tax rates will come into existence after Motor Vehicles (amendment) Bill 2016 is passed by the Rajya Sabha. The standing committee, in its report, too suggested same tax structure to be incorporated in the Act.

MV Act, 2016 will bring sweeping changes in the transport sector as it proposes reforms like heavy fines for over speeding, driving without wearing seat belt, making Aadhaar mandatory for vehicle registration and regulation of cab aggregator like Ola and Uber.

Original Source: https://www.moneycontrol.com/news/business/uniform-12-pc-road-tax-to-make-cars-cheaper-in-mumbai-but-dearer-in-delhi-2575035.html