The stage appears to be set for a hike in the life tax of all personalised vehicles. Taxes in respect of company owned vehicles and individuals owning second and subsequent vehicles are also likely to increase.
While lump sum tax of 9 % of the cost of vehicle is being levied on two wheelers, the Transport department has proposed to divide the vehicles into two categories — vehicles costing up to ₹50,000 will continue to be charged life tax at 9 % while the motorcycles whose price exceeds ₹50,000 are proposed to be charged at 12 %.
Changes are also proposed in respect of tax levied on three or four wheelers, including cars, jeeps under non-transport category, omni buses up to seating capacity of 10 and new motor cabs and motor cabs coming from other States that are entering into the rolls of the State by way of change of address or transfer of ownership. The existing lumpsum tax on these newly registered vehicles whose cost up to ₹10 lakh is 12 % and for vehicles exceeding ₹10 lakh is 14 %.
The department is proposing to categorise these vehicles under four categories for levy of tax in four slabs.
Accordingly, tax of 13 % is proposed on the vehicles costing up to ₹5 lakh and it would be 14 % in respect of vehicles costing between ₹5 and ₹10 lakh. Tax of 17 % is proposed on vehicles costing above ₹10 lakh and below ₹20 lakh while it would be 18 % for those costing above ₹20 lakh. The department proposed an additional tax of 2% over the above the prescribed rates for individuals owning second or more vehicles and sought an amendment to Seventh Schedule of the Telangana Motor Vehicles Taxation Act 1963.
The department is anticipating additional revenue on account of the amendments proposed to the Act to be around ₹1,400 crore. This is in addition to the amendments proposed in respect of Green Tax. Personalised vehicles are presently being categorised as more than 15 years and below 20 years and those above 20 years for the purpose of green tax. This is envisaged to be changed into three categories — more than seven years below 10 years, more than 10 years below 12 years and more than 12 years. The change was expected to yield revenue of ₹120 crore.
This apart, the department is proposing enhancement of existing rates of quarterly tax on motor vehicles by 25 % subject to not exceeding the maximum tax specified in the first schedule of the Act. The hike was proposed as the existing rates of quarterly tax had been fixed way back in 2006 and had not been amended ever since and change in the tax pattern is likely to generate additional revenue of ₹100 crore.
The department is contemplating collection of quarterly tax from other State contract carriage buses covered by all India tourist permits entering into the State with an expected additional revenue of ₹ 35 crore. It proposes to impose road safety cess of ₹500 on two wheelers, ₹2,000 for four wheelers and ₹2,500 for transport vehicles at the time of registration. Passenger autorickshaws, light goods vehicles, tractors and tractor trailers used for agricultural purposes would however be exempted from the road safety cess.
