Tax on GST stumps J&K’s new vehicle buyers, dealers

Amit Khajuria
Tribune News Service
Jammu, December 2

Bizarre as it may sound, the Jammu and Kashmir administration has started levying tax on the GST collected from consumers buying new vehicles. The Union Territory’s transport department has started levying 9% token tax on the GST collected from the sale of vehicles. Earlier, the token tax was levied only on the net amount of the vehicle.

In its November 26 order, the department has sought to clarify that the one-time token tax will be charged on the bill amount of the vehicle, which includes 18% GST and  additional auto cess. In its earlier August 1 order, the Governor’s administration of the erstwhile state had said 9% token tax would be levied on the cost of the vehicle purchased from August 1 onwards. Automobile dealers started charging 9% token tax on the net value of the vehicle, i.e. bill amount minus GST and other taxes, from customers.

“I had brought a car in October and paid 9% as token tax to the dealer, but even after applying for the registration certificate, I didn’t get response from the Regional Transport Office. When I contacted the office, they asked me to deposit additional 2% tax,” said Rajesh Sharma, a consumer.

“If 9% was to be levied on the gross amount, it should have been clarified on August 1 itself. We have already paid tax at the time of purchase. Now they want us to pay additional tax,” he said.

The automobile dealers, already facing recession, are worried about sales. “The sales are already at an all-time low and these changes may cause further hardship for dealerships,” said an office-bearer of J&K Automobile Dealers Association.