Free ride on highways but govt may charge one-time levy | india | Hindustan Times
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Free ride on highways but govt may charge one-time levy

india Updated: Jul 29, 2014 01:08 IST
Moushumi Das Gupta
Moushumi Das Gupta
Hindustan Times

The government is considering a plan to exempt private vehicles from paying toll charges for using highways and instead levy a one-time 2% tax on new vehicles.

The proposal follows a study by the national highways authority of India (NHAI) that found private vehicles generated just 14% of revenue at toll plazas but accounted for nearly half of the traffic at toll plazas. The remaining 86% of revenue was paid by commercial vehicles. The study was conducted at 50 of NHAI’s 285 toll plazas on highways.

“Collecting toll from private vehicles not only clogs the toll plazas but also seems to be an inefficient way of generating revenue,” a senior NHAI official told HT.

Based on the study, NHAI concluded that private vehicles paid about Rs 1,600 crore as toll in 2013-14 against Rs 9,800 crore paid by commercial vehicles.

Levying a one-time tax of 2% of the value of the vehicle at the time of its registration, he said, was a more efficient system.

A road ministry estimate indicates the government could annually generate Rs 1,840 crore. Owners of existing vehicles would have to pay Rs 1,000 under this formula, adding another Rs 2,156 crore to the exchequer in the first year.

The second option on the government’s drawing board is to raise fuel cess – introduced in 2000 to fund highway expansion – to 2%. Presently there is a cess of 1.36% on petrol and 1.73 %on diesel.

“We are going to seek comments from all stakeholders before arriving at a decision,” said an official.

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