Explainer: Taxing entry into Himachal

THE substantial increase in the toll tax from April might be a monetary gain for the cash-strapped state, but it is set to become a substantial drain on tourists entering Himachal Pradesh from various inter-state barriers.Private cars will have to shell out Rs 170 as against Rs 70 earlier. Passenger vehicles of 12-plus-one seating capacity will be charged Rs 170 as against Rs 110 earlier. A 32-seater mini bus will pay Rs 320, up from Rs 180, while for commercial vehicles, this levy has been fixed at Rs 600, up from Rs 320. Large goods vehicles will pay a toll of Rs 900, up from Rs 720. A tractor will have to shell out Rs 30 extra, while construction machinery will be levied an additional Rs 130, up from Rs 570 earlier.Going back five decadesToll tax was levied for the first time in 1975 with the enactment of the Himachal Pradesh Tolls Act, 1975. A levy of Re 1 to Rs 3 was imposed on five categories of vehicles.Toll barriers were established on several internal roads where the Public Works Department (PWD) was authorised to collect the fee. Since maintenance of roads in the hilly areas is more expensive due to difficult geographical, geological, and climatic challenges, the government enacted this legislation to generate funds.Over time, several inter-state barriers were set up on national highways in border districts like Solan, Sirmaur, Una, Bilaspur, Kangra as well as Shimla.Generation of fundsToll collection has become a money-spinner for the cash-strapped government. The annual auctions register aggressive bidding. While they were auctioned for Rs 173.89 crore for the current fiscal, the State Taxes and Excise Department, which collects this levy, revises its base price by about 10 per cent annually.Undeterred by the opposition from the neighbouring states, successive governments have been charging it from outstation and commercial vehicles. Private vehicles from the state were exempted some years ago after residents raised a hue and cry.With an exponential increase in the toll rates for the next fiscal, the department has auctioned the barriers for Rs 228 crore, up by Rs 43 crore against the reserve price of Rs 185 crore.Basic purpose being defeated?Notwithstanding the fact that tourism is a key contributor to the state’s economy, this increased levy can adversely hit tourist influx. With no extra funds being granted for the maintenance of roads in areas where toll is collected, its basic purpose appears to have been defeated. What’s more, the national highways are maintained by the National Highways Authority of India (NHAI), barring a few roads where the Centre has delegated power to the state NH authority to maintain these roads.What is more perturbing for a tourist entering the state from key highways like Parwanoo is an additional toll tax imposed by the NHAI. It has been charging this fee since April 2021 after the Parwanoo-Kaithlighat section of the Kalka-Shimla highway was four-laned. Motorists argue that the move violates NHAI’s own policy of levying toll after every 60 km.Travellers from Chandigarh already pay toll at Chandimandir and again at Sanwara, even though the distance between the two plazas is less than 60 km. This is in addition to the state-level toll levy.They also question how the state government can charge toll on a road maintained by the NHAI though the latter, too, has faltered in the proper maintenance of the road. A Nangal-based advocate, Uttansh Monga has now challenged it in the high court.Voices against the moveFormer BJP Transport Minister MN Sofat termed the state toll tax an unnecessary burden, especially given the persisting road safety issues. He pointed out that toll collection on the key Parwanoo-Solan stretch had earlier been suspended between September 20 and November 12 last year due to poor road conditions, underscoring the inconsistency in NHAI’s approach.While the state eyes revenue through the entry toll, hoteliers fear that such undue charges could force tourists to explore other options like Uttarakhand.

Explainer: Taxing entry into Himachal

As the state govt effects a sharp rise in toll tax, the rationale behind it comes under scrutiny

Ambika Sharma

Explainer: Taxing entry into Himachal

As the state govt effects a sharp rise in toll tax, the rationale behind it comes under scrutiny

Ambika Sharma

Unlock Premium Insights in This Article