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Lifetime tax on cars, motorcycles to go up

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Anil Kumar Sastry

Yediyurappa says idea is to discourage new registrations

  • 'Rise in registration of vehicles contributing to air pollution'
  • Temporary registration of vehicles too to be taxed

    BANGALORE: At a time when automobile manufacturers are contemplating raising the prices, the budget has brought more worry to prospective buyers by proposing an increase in lifetime tax on cars and motorcycles.

    Stating his reason, Mr. Yediyurappa said there was an alarming rise in the registration of cars and motorcycles, contributing to air pollution and traffic problems. A higher rate of lifetime tax was being proposed to discourage new registrations.

    Hitherto, a lifetime tax of seven per cent on the value of motorcycles, irrespective of their horsepower and price, was being collected at the time of registration. The budget proposes to increase the tax rate to eight per cent on vehicles priced below Rs. 50,000 and to 10 per cent on those priced above Rs. 50,000.

    For cars, jeeps, omnibuses and private service vehicles, it was nine per cent if the value of the vehicle was below Rs. 5 lakh, 10 per cent if the value was between Rs. 5 lakh and Rs. 10 lakh and 12 per cent if the value was above Rs. 10 lakh.

    Mr. Yediyurappa proposes to increase the tax component to 10 per cent for the first category, 11 per cent for the second and to 14 per cent for the third.

    The Government plans to rake in the stuff even when new vehicles are taken for temporary registration to the RTO. It proposes to levy Rs. 100 for motorcycles as temporary registration tax, Rs. 200 for light motor vehicles, Rs. 400 for medium passenger/goods vehicles, Rs. 600 for heavy passenger/goods vehicles, Rs. 500 for vehicle chassis and Rs. 300 for others.

    Small-time goods vehicle operators, who own mini goods carriers of lesser capacity, get a breather.

    Because of the administrative difficulty in collecting quarterly taxes from such vehicles having a gross laden weight of more than 1,500 kg but less than 3,000 kg, the budget has proposed to levy a lifetime tax on them: Rs. 10,000 as lifetime tax is proposed for vehicles with gross laden weight between 1.5 tonne and 2 tonnes and Rs. 15,000 for those with gross laden weight above 2 tonnes but below 3 tonnes.

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