Buying vehicles in Punjab gets costlier after increase in tax

Tribune News Service

Chandigarh, August 22

Days after increasing the collectorate rates for registration of properties, the state has increased the motor vehicle tax on two-wheelers and four-wheelers with immediate effect.

Much to the disappointment of prospective vehicle buyers and dealers, the tax has been increased just ahead of the festival season when the maximum sales are reported.

The tax is on the actual cost of the vehicle excluding taxes, said a senior functionary of the transport department.

Last time, the road tax was revised in 2021.

Now buying a four-wheeler costing up to Rs 15 lakh has become dearer by anything between Rs 7,000 and Rs 20,000.

The maximum effect would be on the vehicle costing between Rs 15 lakh and Rs 25 lakh, wherein the tax has been increased by 1 per cent.

A new category has been introduced for high-end vehicles like SUVs costing above Rs 25 lakh, where tax at 13 per cent on the cost of the vehicle has been imposed. For a vehicle costing Rs 30 lakh, the tax would be Rs 3.9 lakh.

For two-wheelers, the increase is comparatively less. For two-wheelers up to Rs 1 lakh, the tax has been increased by 0.5 per cent and for those costing between Rs 1 lakh and 2 lakh, the tax has been increased by 1 per cent. A new category has been made for high-end two- wheelers costing above Rs 2 lakh, wherein the tax is 11 per cent of the cost of the vehicle.

Officials said there has been pressure from the government to increase the revenue generation from such taxes.