Cars and two-wheelers in Haryana will now cost more as the state government on Saturday decided to hike the road tax.

The state cabinet, which met on Saturday, also decided to levy VAT on bidis to discourage consumption. It approved the transport department’s proposal to revise the existing rates of road tax for vehicles used for personal purposes, an official release said.

For two-wheelers costing up to Rs 20,000, the rate of road tax will remain unchanged, which is two per cent. For two-wheelers costing more than Rs 20,000 and up to Rs 60,000, four per cent tax will be levied.

Similarly, it would be six per cent on vehicles costing above Rs 60,000 and up to Rs 2 lakh. The road tax will be eight per cent on vehicles priced above Rs two lakh, the release said.

Earlier, four per cent and five per cent tax was levied on vehicles costing between Rs 60,000 to Rs four lakh and over Rs five lakh respectively. Similarly, people buying four wheelers, including cars, will have to pay tax at a rate of three per cent for vehicles costing up to Rs 6 lakh. Cars costing between Rs six lakh and Rs ten lakh will be taxed at the rate of six percent.

For cars costing above Rs 20 lakh, the rate of tax will be nine per cent. The tax shall be levied on ex-showroom price of the vehicle, including VAT.

Previously, vehicles costing up to Rs five lakh were charged two per cent. Vehicles in the range of Rs five to ten lakh at four per cent, Rs 10-20 lakh at six per cent while eight per cent on vehicles costing above Rs 20 lakh was being charged.

The release said the Punjab government has already revised its rates and is charging a minimum motor vehicle tax of six per cent on four-wheelers from the year 2012. A similar proposal is also under consideration of the Chandigarh administration, it said, adding the rates of road tax being charged by Delhi government are also on higher side.

The rates of road tax to be charged by Haryana government after revision will continue to be on the lower side as compared to the rates prevalent in the adjoining states, it pointed out.

Meanwhile, with a view to discourage the consumption of ‘bidis’, the state government decided to levy VAT at a rate of five per cent (plus surcharge at a rate of five per cent) on the sale of ‘bidis’ with immediate effect.