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private cars by 2%
`Funds Can Be Used To Beef Up Public Transport'
The state cabinet has approved a 2% hike in onetime vehicle registration tax on
private twoand four-wheeler vehicles. The cabinet has also capped the tax at a
In Maharashtra, the tax is in the range of 9-11% for petroldriven cars based on
the cost of vehicle, and 11-13% for those that ply on diesel. The tax slabs will now
Officials said following implementation of the Goods and Services Tax (GST)
from July 1, the state government will lose nearly Rs 700 crore as revenue towards
octroi and local body tax (LBT) on vehicles.It has, therefore, decided to make up for
the loss by hiking the tax to help generate an annual revenue of Rs 750 crore. The
state cabinet has approved a 2% hike in one-time vehicle registration tax on private
twoand four-wheeler vehicles. The cabinet has also capped the tax at a maximum of
Reacting to the development, senior transport department officials said the rate
of vehicle registration tax in the state depends on the cost of cars and engine power
For imported high-end cars, though, the state government has capped the tax
amount to Rs 20 lakh; it was earlier 20% of the total vehicle cost. The tax on two-
There are many cases of high-end imported cars being registered in Jharkhand
and Diu Daman as the tax in these states was lower than in Maharashtra. With this
decision, we have tried to get on a level playing field with most of these states, said
a senior official.
While transport experts have welcomed the government move, Ashok Datar of
Mumbai Environmental Social Network said the government should have hiked road
In some foreign countries, the registration tax is in the range of 50% to 120%.
If a hefty tax is collected from car buyers, the money can be used to streng then our
public transport system. He further said that it was yet to be seen whether the tax
hike impacts car buyers.With abolition of octroi (4.5%) and dip in car prices in
several categories, will a 2% hike in tax make any difference or will it really act as a
deterrent to car buyers? asked Datar, who has repeatedly demanded control on the
growing car and bike population on city roads. Mumbai has more than nine lakh
private cars and 18 lakh two-wheelers, and nearly 150 new cars are ad ded on city
roads daily.
which is a one-time road tax--will ensure that the government earns more revenue.
Another transport expert said that increasing road tax for diesel cars to as high
as 15% could ensure that the population of diesel vehicles, which causes air