In a bid to rationalise motor vehicle taxes pan India, the Centre has asked States to levy one-time road tax of six per cent on the sale prices on cars and two wheelers from April next year.
“The Centre has decided to levy a life time tax on two wheelers, cars and light motor vehicles at the floor rate of six per cent or more on the sale price,” said Minister of Roads and Transport Oscar Fernandes. The Minister was addressing the State heads at the 35th Transport Development Council (TDC) meeting in the Capital on Wednesday.
“Official committee constituted for this purpose has also recommended implementing it from October 1, 2013. However, all the State Governments and Union Territories should issue notifications to take necessary action to implement the decision from April 1, 2014,” he said.
Fernandes said that, there were wide variations of taxes on motor vehicles from State to State, not only in terms of quantum of tax but also in terms of basic taxation structure. He said that this move would help in facilitating seamless movement of vehicles across the States and also ensure that there are no inter-State tax wars.
The Center had proposed a minimum rate of six percent tax on the sale price and a committee was set up to work out its implementation. Currently, the States charge between two percent to 18 percent road tax on cars. The proposals were made by the TDC headed by former Road Transport and Highways Minister C P Joshi.
They were made to prevent the ongoing discrepancy in the road tax levied by different states in India, following which is the vehicle prices are different in different States. Fernandes also urged members of TDC to agree to rationalising taxes for taxis and maxis operating within the state and also inter-State from April, 2014. “large numbers of vehicles are used by tourists, move for the purpose of religious, cultural or leisure activities. There is need to promote free movement of such vehicles to encourage tourism and TDC should work towards it,” he said.