GST impact : Maharashtra government hikes one-time registration tax for vehicles by 2%
Mumbai city news: High-end vehicles costing more than Rs20 lakh have been kept out of the ambit of this hikemumbai Updated: Jul 07, 2017 12:38 IST
In a bid to mop up additional resources, post implementation of Goods and Services Tax (GST), the state government has decided to hike one-time tax for registration of all new vehicles, including two-wheelers, three-wheelers and four-wheelers by 2%. However, high-end vehicles costing more than Rs20 lakh have been kept out of the ambit of this hike. The decision was taken in the state cabinet meeting on Monday.
The state government currently levies one-time tax on vehicles ranging from 8% to 20% on bikes and 9% to 20% on cars.
With the imposition of GST and the consequent scrapping of octroi and local body tax (LBT), the state government is expected to lose around Rs700 crore in annual revenue on new vehicles. While octroi and LBT were local taxes collected by the Mumbai civic body and other municipal corporations and councils, the state is expected to give them compensation for this loss now.
As a result, officials claimed the state government has decided to impose a one-time tax on vehicle registrations.
Manoj Saunik, principal secretary, state transport department said, “The decision will come in to effect the day the ordinance making changes in Maharashtra Motor Vehicle Tax Act 1958 is promulgated.”
He confirmed the hike has been made to cover losses the government will have to face with the abolition of octroi and LBT.
The transport secretary said they have decided not to increase the tax rate on high-end vehicles costing more than Rs 20 lakh because they are already being charged 20% tax, a cap determined by the state for one-time tax on vehicles.