Uniform Vehicle Tax
Parthasarathi Loganathan
(Querist) 20 March 2010
This query is : Resolved
LAW NEWS :
The Centre plans to invoke a constitutional provision to end the wide disparity and diversity of motor vehicle taxes across the states. The idea is ensure that sundry taxes and levies on vehicles, including excise duty, road tax, registration charges and toll tax for plying on specified roads, are rationalised and made uniform across the country. Currently, state-level taxes on vehicles vary widely not in terms of rates but also in their application. The rate of road tax ranges between 4% and 15% of the excise-borne retail price of the vehicles. While some states levy a lifelong road tax, annual levies prevail in others. Then there are other imposts like parking charges imposed by states like Delhi. The vehicle owner is also required to pay toll charges to operators of specified stretches of roads, as fixed by the National Highways Authority of India or state-level authorities. Currently, motor vehicle taxation is a state subject and the central government can only be an advisor in the matter. Although the Centre has been insisting on certain uniformity in motor vehicle taxes, the states have mostly ignored it, in the absence of a legal provision. The Centre is now considering making it mandatory for states to heed its advice in this regard. Road transport and highways secretary Brahm Dutt told FE: “Under the Constitution, the Centre is empowered to advise states on motor vehicle tax. This is in the Union list in the Constitution. We are finalising the guidelines and putting it in the form of an Act so that there is uniformity in these taxes.” Stating that making vehicle taxes uniform is the Centre’s “responsibility,” Dutt said this would go a long way in ensuring seamless travel and would boost the economy. He said the road ministry has asked the S Sundar committee to look into the issue and give its recommendations. The committee was set up last year to suggest suitable changes in the Motor Vehicle Act, 1988. The committee is expected to submit its report before the monsoon session of Parliament. Most states impose a one-time tax on motor vehicles for a fixed period of time. This tax depends on whether the vehicle is for transportation or other purposes. Toll charges are fixed by the road authorities on the basis of distance covered and the type of vehicles. “The power (of formulating mandatory norms on vehicle taxes) has not been used by the Centre so far..
Parthasarathi Loganathan
(Querist) 20 March 2010
LOGAN VIEWS:
Before enforcing this as a statute Government should first consider interlinking all RTO offices (Regional Transport Authority) to Income Tax Office. Income status and sources of income of the vehicle owner must first be ascertained before any Registration of vehicle is done. This would ensure uniform taxation or bring all into the tax net.
