Lifetime tax for cabs to go up

Motor vehicles tax for cabs costing more than Rs 10 lakh has been revised in the budget.

Now, a uniform lifetime tax at 15 per cent of the cost of the vehicle will be levied on cabs.

Currently, motor cabs with a seating capacity of up to 5+1 are paying Rs 100 per seat per quarter and motor cabs with a seating capacity of 6+1 and floor area not exceeding six square metres are paying Rs 750 per square metre.

This tax is now proposed to be revised. According to Transport Commissioner T Sham Bhatt, this has been done as some owners of private cars had registered their vehicles as cabs to avoid paying lifetime tax. “This is a one-time tax and we expect to get an additional revenue of Rs 20 crore to Rs 25 crore from this change,” he added.

Motor vehicles tax collections for 2011-12 is set to exceed the target set in the last year’s budget by around Rs 300 crore. As against the target of Rs 2,800 crore, the Transport department expects revenue in the range Rs 3,050 cr to Rs 3,100 cr.

Chief Minister Sadananda Gowda, in his budget speech, said the government expected to collect Rs 3,350 crore in the next financial year. Bhatt told Deccan Herald the projections were in line with the recent trend which has seen a yearly increase of 10 per cent in revenue collection.

According to Radhakrishna Holla of Bangalore Tourist Taxi Association, this new tax adds to the misery inflicted by the Union Budget. “There are more than 10,000 cabs that will be affected by the government’s move. Most cab owners can’t afford to pay this new tax.”

He said the depreciation set by the government is unrealistic. “They have set the valuation of a car over three years at 81 per cent of the value of a new car. This is almost 20 per cent more than the bank valuation.”

Radhakrishna said other states have introduced the same system, but the tax is set between six and eight per cent.

Border checkposts

The government has proposed to set up weighing motion systems at Kognolli and Humnabad border checkposts to control overloading. The government will also introduce online collection of vehicle registration data from authorised dealers for rendering speedy services.

To test the skill of candidates scientifically and accurately before granting them driving licence, automated driving test tracks will be established in Hassan, Gulbarga and Bangalore (Electronics City) RTOs. Bhatt said this will ensure that the tests are entirely objective. “This makes the whole process more transparent and there is no scope for any kind of manipulation,” he noted.


* Vehicle inspection and certification centres in Mysore and Dharwad RTO jurisdictions will be established.

* Midway plaza facilities will be established at important locations.

* Rs 30 crore is being provided for setting up truck terminals.

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