After hike, state may cut tax on imported and company vehicles
Potential buyers of imported cars have reason to cheer. The state government is proposing to put a 20% cap on the motor vehicle tax on imported cars and company-owned vehicles.mumbai Updated: May 16, 2012 01:08 IST
Potential buyers of imported cars have reason to cheer. The state government is proposing to put a 20% cap on the motor vehicle tax on imported cars and company-owned vehicles.
The proposal is up for consideration at Wednesday’s cabinet meeting.
The state had recently increased the tax on motor vehicles, effective from May 1 this year. After the revision, owners of cars under these two categories were paying up to 26% tax under the revised rates.
The proposal, if passed, would relief for buyers of high-end cars, because many manufacturers prefer to import such cars instead of making them indigenously. This includes brands such as BMW, Audi and Mercedes.
A senior official said that the decision was prompted by the reduction of sales of imported cars in Maharashtra, where the MVT is among the highest in the country. There was also pressure from manufacturers of motor vehicles to reconsider the tax in this category.
According to clause 3(B) of Bombay Motor Vehicle Tax Act-1958, Motor Vehicle Tax levied on imported or corporate vehicles is double the tax on vehicles manufactured indigenously and owned by individuals.
So, for an indigenous petrol car costing Rs 40 lakh, the owner will have to pay 11% tax, or Rs 4.4 lakh, while for an imported vehicle of the same cost, the tax amount will be Rs8.08 lakh, nearly double the amount.
For company-owned vehicles too, the tax will be reduced. About 30% of the vehicles registered in Mumbai are in the name of firms.
The MVT for petrol and diesel vehicles has been hiked by 2% and 4% respectively, while that on CNG vehicles was reduced by 2%.