Thiruvananthapuram

Entry tax: ball in Karnataka’s court

Reciprocal pact with Kerala will lessen burden on Karnataka-registered tourist vehicles

: The reluctance of Karnataka to sign a reciprocal agreement with Kerala as done by the other three southern States has made it mandatory for Karnataka-registered tourist vehicles with all-India permits to pay an entry tax for the entire year irrespective of the trips made to Kerala.

The revenue loss to the State exchequer, particularly by Volvo bus inter-State operators, most of whom hail from Kerala, and have registered their vehicles in Karnataka to evade tax, has also resulted in the July 18 order.

The hike in taxes for contract carriages with all-India permit from Karnataka and bringing tourists to Kerala is part of the taxation measures contained in the State Finance Bill.

Official sources said the Transport Department had been trying to enter into a reciprocal pact with Karnataka on the lines of Tamil Nadu, Andhra Pradesh and Puduchery to avoid such a situation for over the last two years and to facilitate tax-free entry into any of the States. “The issue was taken up at the Chief Ministers’ and Transport Ministers’ level and at the southern Transport Ministers’ conference,” he pointed out.

In the absence of the reciprocal agreement, the official said Karnataka was levying entry tax from Kerala-registered tourist vehicles with all-India permits annually irrespective of the trips made to Karnataka during the last two years.

The Transport Minister had intervened when Karnataka started collecting a lifetime tax from vehicles registered in Kerala and plying in the State beyond 30 days. The High Court has now declared unconstitutional the Karnataka Motor Vehicle Taxation (Amendment) Act, 2014.

Finance Bill

The Finance Bill has clearly pointed out that if any State (Karnataka) accepts an annual tax from motor vehicles registered in Kerala, the annual tax will only be taken from the motor vehicles from that State (Karnataka) coming down with all-India permit under Section 88(9).

Of the hundreds of contract carriages operating between Kerala and Karnataka and other cities and towns, only 20 are registered in Kerala. Association of Tourism Trade Organisations India (ATTOI) president Anish Kumar P.K said reports of tourists returning at check-posts on the Kerala-Karnataka border unable to pay the hefty tax and tourists crossing over and hiring Kerala registered vehicles are pouring in.

The Motor Vehicles Department is aware of the hassles faced by the tourists coming through the check-posts of Walayar, Manjeswaram and Muthanga since July 19. Joint Transport Commissioner Rajeev Puthalath said the concerns of the short-visitors will be taken up with the government once the petition is obtained. The issues likely to crop up during the Sabarimala season will also be looked into. The new taxes for vehicles from other States are on a par with vehicles registered in Kerala and having all-India permit, he added.

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Printable version | Feb 18, 2020 6:43:14 PM | https://www.thehindu.com/news/cities/Thiruvananthapuram/Entry-tax-ball-in-Karnataka%E2%80%99s-court/article14515037.ece

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