The decision to collect lifetime tax (LTT) on out-of-State vehicles is reaping a windfall for the Transport Department, with more than Rs. 100 crore coming to the coffers as tax just in Bengaluru since February 2014.
After the Karnataka High Court vacated the stay on the amendment of the Karnataka Motor Vehicles Taxation (Amendment) Act, 2014, the department netted a further Rs. 7 crore towards tax, said officials.
Following the amendment in February last year, the department conducted a crackdown on out-of-State vehicles. The drive took a hiatus as the High Court stayed it. The crackdown resumed after the stay was vacated.
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“After the amendment, we took up a drive during which more than 5,000 cars were targeted, and we collected tax totalling Rs. 40 crore. Following this, people voluntarily paid the tax… This alone has seen an estimated Rs. 60 crore being paid to the Regional Transport Offices,” said Narendra Holkar, Joint Commissioner (Enforcement). The taxes levied come between Rs. 50,000 for smaller, compact cars to more than Rs. 15 lakh for high-end cars that have been registered in Union Territories (Puducherry, for instance).
The calculations of tax, however, have left many puzzled and even contemplating sending their cars back to their home State. For instance, K.V. Krishnaswamy, a retired professor, says the department has imposed tax of Rs. 54,500 on his nine-year-old compact car bought in 2006 in Chennai. “The figures are absurd. I’ve paid Rs. 60,000 then, and now have to pay Rs. 54,500 even after nine years… It’s more economical for me to sell the car back in Chennai,” he added.
Waseem Memom, who started the “drive without borders” campaign, believes the calculations are arbitrary. “More often than not, one is paying 25 per cent more than the actual tax,” he said.
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In response, Rame Gowda, Transport Commissioner, said: “If there are any issues with the calculations on lifetime tax, they can take it up with the local RTO or with the central office.”