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The Ministry Of Road Transport and Highways (MORTH), has proposed a new tax structure for vehicles across the country. According to the new proposal, a new uniform tax rate will be introduced soon, across India.
The new tax structure will also change the prices of vehicles across the country. Prices of cars, SUVs and two-wheelers will increase or decrease depending on the city's tax rates. Cities like Bangalore or Mumbai, which have comparatively higher tax rates will see a reduction in vehicle prices. However, vehicles in other cities like Delhi with low tax rates will become more expensive.
The uniform tax proposal though will have its share of benefits. One of which is the inter-state transfer of used cars across the country. The new proposal will help change the current time-consuming procedure into a more streamlined process online.
As per the new proposal, owners will not have to pay any road tax while transferring their vehicles from one state to another. This rule though will apply to only those vehicles, which are over two years old or when the difference in the tax rates of the two states is less than two percent.
The Centre has set up a group of state transport ministers (GoM), who will address the concerns related to the transport sector, while also recommending reforms.
The National Informatics Centre (NIC) has already set up two central online databases: Vahan-4 and Sarathi-4. The Vahan-4 will be used for registering details of vehicles. While the Sarathi-4 gives access to authorities who can delete existing registration numbers or licenses and issue new ones after application.
The GoM has recommended three divisions for the road tax: eight percent for vehicles costing under Rs 10 lakh, 10 percent for vehicles between Rs 10 - 20 lakh and 12 percent for those above the 20 lakh prices.
The transport ministry has also proposed a ‘One Nation - One Permit' structure for commercial vehicles. This proposal will ease the transfer of goods across the country. This could further lead to a decrease in the cost of commodities such as food etc.
Thoughts On The Uniform Tax Proposal
The uniform tax across the country once implemented, could see a reduction of people misusing the varying tax rates. It will discourage people to register their vehicles in lower taxed regions and use them in comparatively higher taxed cities.