Owners of low budget vehicles will suffer when the national Capital moves towards a standard road tax policy for private vehicles. The structure, which is under consideration with the Delhi Government once implemented, would imply that vehicles irrespective of their purchase price will have to pay a standard road tax of 6 per cent to the State Transport Authority. With the uniform road tax policy, buyers of low cost two-wheelers will have to bear the brunt.
So far, only 2-4 per cent tax is levied depending on the vehicle price. The decision to rationalise road tax and levy a standard rate of 6 per cent on all the vehicles in various States was taken at the inter-State Transport Development Council (TDC) on Wednesday.
“The committee, constituted of various transport secretaries of different States, has given an in-principle nod to the standard rate of 6 per cent. The Transport Department of Delhi Government has expressed its willingness to move towards the recommended floor rate of 6 per cent for two-wheelers and four-wheelers. In this regard, the proposals on the amendment of Delhi Motor Vehicle Act are under submission with the Delhi Government,” said a Delhi Government official.
Presently, the road tax is calculated on the basis of the price point of the vehicle. “For cars priced till Rs 6 lakh, the road tax levied is 4 per cent of the cost of the vehicle, 7 per cent of the vehicle’s cost in case the vehicle falls in the price bracket between Rs 6 lakh and Rs 10 lakh; 10 per cent of the cost of the vehicle in case of medium and high-end cars, which exceed Rs 10 lakh,” said the official.
The standard tax structure, which will be implemented across India, aims to simplify the tax structures for motorists and car buyers and translate into larger economic and welfare benefits.