Thursday, March 10, 2016

Non-Karnataka Vehicles Need Not Pay Lifetime Tax

 

The big news and hot topic of discussion today was not the cricket matches, or the looming elections, or the political cacophony, or Mallya’s escape. The big news is the Karnataka High court ruling in favor of owners of vehicles not regsitered in Karnataka. You see, any vehicle with a non-KA number is instant feast for the traffic police. If the vehicle is in Karnataka for more than 30 days, they have to pay lifetime tax. And vehicle taxes of Karnataka is highest in the country ! The high court on Thursday quashed the amendment (to Karnataka Motor Vehicles Taxation) by the state government to collect LTT from the vehicles registered outside the state and plying in the state for more than 30 days.

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The court also quashed the demand notices issued by the Regional Transport Offices (RTOs) to owners of several such vehicles to pay the tax. Several non-KA numberplate bearing vehicles were seized by the Transport Department for non-payment of tax and plying in Karnataka beyond 30 days. The state government had implemented the rule by notifying it in the gazette on February 28, 2014.

In the first year of implementing the rule (2014-15), the transport department collected a whopping Rs 40 crore by initiating action against over 4,000 'defaulting' vehicle owners.In the last two years after the rule came into force, RTO managed to collect Rs 100 crore through LTT and penalties.

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Road tax on passenger vehicles is the highest in Karnataka, across all price slabs. Overall, road tax is more than 10% in Karnataka, Tamil Nadu, Andhra Pradesh and West Bengal. Rates in northern states, which comprise a high volume market, are between 8% and 4% for cheaper cars and around 8% for mid-segment cars. But as car prices (ex-showroom) rise, road tax rates go up even in states such as Delhi and Rajasthan.

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