Car crowd tax in state - One-time hike for new buyers

Calcutta, July 18: Buyers of new cars in Bengal will have to fork out more money for registration with the state passing a bill today to prepare itself for a proliferation of four-wheelers on the roads.

The one-time increase in registration tax will range from Rs 2,000 to Rs 8,000, depending on the engine capacity. (See chart)

The new rates, which will come into effect only after a gazette notification is issued, will cover registration of cars, buses and battery-operated vehicles.

The one-time revised tax is valid for five years after which the owner of the vehicle can pay the levy at the old rates. For those who are paying a five-year road tax for old cars, there will be no change in the structure.

A special tax for vehicles with air-conditioners remains unchanged but a new category has been introduced for engine capacity beyond 2500cc.

“The pressure on roads is increasing by the day as new cars will be flooding the streets. Hence, more funds are required to be spent on infrastructure. That’s why we decided to collect a revised five-year tax for new cars. After that, these cars will pay taxes at old rates,” transport secretary Sumantra Chowdhury said.

The official did not make any reference to the Tata Nano but the “the Rs 1-lakh car” is scheduled to hit the roads in a few months.

Estimates made soon after it was unveiled had forecast a flood of cars on Indian roads after the Nano enters the market.

“We had to increase the tax rates in order to keep pace with the rapid industrial development in the state,” transport minister Subhas Chakraborty said.

The minister said the tax hike was needed “to cope with the escalating cost of running the transport administration and maintenance of roads. The money will also help us construct infrastructure facilities for swift movement of motor vehicles on city roads”.

In the principal act, no tax was charged for the registration of battery-operated motor vehicles. However, from now on, the government will charge a one-shot lifetime tax on the registration of such vehicles.

“Earlier, motor cars, motor cycles, motor vehicles and buses were within the purview of taxation. But from now on, vehicles operated by batteries will also have to pay taxes during registration,” the minister said.

Neither the minister nor officials explained why battery-operated vehicles were being brought under the tax when rising oil prices and pollution have prompted many countries to encourage the use of alternative sources and clean energy.

Citing the huge changes Calcutta has undergone, the minister said: “In 1980, only 80,000 buses used to run in the city. But now that has increased to almost 14 lakh. So we will have to construct new roads to make space for them and for that we have increased the tax.”