The Maharashtra state cabinet has approved a 2% hike in onetime vehicle registration tax on private two and four-wheeler vehicles. The cabinet has also capped the tax at a maximum of Rs.20 lakh to discourage registration of vehicles outside the state. The burden on vehicle buyers will be compounded by the recently introduced 2% road safety cess on this increased tax.
In Maharashtra, the tax is in the range of 9-11% for petrol driven cars based on the cost of vehicle, and 11-13% for those that ply on diesel. The tax slabs will now increase to 11-13% and 13-15%, respectively .
Officials said following implementation of the GST from July 1, the state government will lose nearly Rs.700 crore as revenue towards octroi and local body tax 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.
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-wheelers has been increased to 10-12% from 8-10%.
While transport experts have welcomed the government move, Ashok Datar of Mumbai Environmental Social Network said the government should have hiked road tax by at least 30%.
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 pollution, remains in under control on city roads.