Andhra Pradesh CM gives nod to hike taxes levied by Transport dept

In dire need of funds for his numerous freebie schemes, Andhra Pradesh Chief Minister YS Jagan Mohan Reddy has given his nod for enhancement of various taxes by the Transport Department that could net an additional sum of Rs 400 crore to the exchequer per annum.

Consequently, life tax on two-wheelers and four- wheelers will go up by one to three per cent.

Besides, the Transport Department proposed a hike in quarterly tax on goods carriages in varied percentages and also the Green Tax on aged vehicles, highly-placed official sources revealed.

Transport Minister Perni Venkataramaiah (Nani) reportedly opposed the proposed hike in taxes, saying it would have a negative impact but the Chief Minister was determined on raising resources for his freebie schemes, the sources added.

The last hike in transport taxes was enforced exactly a decade ago when the state was united.

The relevant file has now been sent to the Finance Department and formal orders enforcing the tax hike will be issued next week, the sources said.

The Transport Department earned a revenue of Rs 3,181.78 crore in financial year 2019-20 as against the target of Rs 4,000 crore.

In 2018-19, it netted Rs 3,224.98 crore against a target of Rs 3,687.50 crore.

"We could not really achieve the targets in the last two years, basically due to drop in sale of cars in particular but it has been worse so far this year due to the coronavirus pandemic. The hike this year may only make good some of the loss though it may not exactly fetch additional revenue," a top official of the Transport Department said.

Statistics reveal that there are 1.02 crore two-wheelers in the state and about nine lakh are added every year, fetching a revenue in life tax of Rs 568.48 crore last year.

The department proposed a one per cent hike from the existing nine per cent in life tax on two-wheelers priced up to Rs 50,000 and 1-3 per cent on those above Rs 50,000.

This could net additional revenue of Rs 173.75 crore per annum.

Around 75,000 four-wheelers, including cars, jeeps and omnibuses (10-seater), are added every year to the existing 9. 91 lakh in the state.

The Department collected a sum of Rs 943.47 crore in life tax on four-wheelers in two slabs of 12 and 14 per cent.

The Department proposed a one per cent hike in tax on four-wheelers costing up to Rs 8 lakh, 1-3 per cent on those priced between Rs 8 lakh and Rs 15 lakh, 1-2 per cent on vehicles priced up to Rs 20 lakh and 1-3 per cent on those above Rs 20 lakh.

The Transport Department also proposed a varied tax structure on goods carriages, based on the laden weight of the cargo, with a 10-15 per cent hike on existing rates.

Similarly, Green Tax will also be increased depending on the age of the vehicles, except autorickshaws.

The department is currently earning a meagre Rs 5 crore per annum as Green Tax but it will rise to Rs 35 crore after the hike, the sources added.