The government of Haryana has proposed an increase in the road tax, which will eventually surge the prices of two-wheelers and cars in the state. Interestingly, the state cabinet has approved the proposed revision in the current road tax rates for the personally used vehicles. It must be noted that the road tax on two-wheelers with a price tag of up to Rs. 20,000 has been proposed to remain unchanged, which is currently floating at 2 per cent. Also, the state cabinet has decided to impose VAT on bidis, which is anticipated to discourage its consumption.
On two-wheelers with price over Rs. 20,000 and up to Rs. 60,000, the government has decided to impose 4 per cent road tax. Similarly, 6 per cent cess would be imposed on two wheelers costing more than Rs. 60,000 and up to Rs. 2 lakh. According to an official press release, the vehicles over Rs. 2 lakhs will attract a tax of 8 per cent. Prior to this increase, the state government was charging tax of 4 per cent on vehicles costing Rs. 60,000 up to Rs. 4 lakh and 5 per cent on vehicles priced over Rs. 5 lakhs.
For all the four wheelers, new buyers will have to shelve out 3 per cent road tax on models coming within a price tag of Rs. 6 lakhs. On vehicles falling in a price bracket of Rs. 6 lakhs and Rs. 10 lakhs, the applicable road tax is 6 per cent. For vehicles costing more than Rs. 20 lakhs, the road tax has been set at 9 per cent. Industry experts are of a view that the road tax will be imposed on the ex-showroom price of the model, including the VAT.
Earlier, the models priced up to Rs. 5 lakh were tagged with a road tax of 2 per cent, whereas the vehicles falling in Rs. 5 lakh to Rs. 10 lakh segment were charged 4 per cent road tax. Models priced between Rs. 10 to Rs. 20 lakh were charged at 6 per cent, whereas vehicles priced over Rs. 20 lakhs would attract 8 per cent road tax. Sources close to the development process revealed that the state government of Punjab has already announced the hike in rates and has been charging a minimum vehicle tax of 6 per cent on cars from 2012. Reportedly, a similar kind of proposal has been also in the consideration of Chandigarh administration.
The official release further said that the road tax rates imposed by state government of Haryana after revision will still remain on the lower side under the review of what has been currently prevailing in the adjoining states. With this increase in rates of road tax, auto analysts believe that it will not discourage the confidence of buyers in Haryana towards buying new models.
