In tit-for-tat move, Punjab mulls tax on Himachal vehicles after hill state hikes entry fee

The Punjab government is considering a reciprocal tax on vehicles coming from Himachal Pradesh, nearly two weeks after the hill state increased the entry fee for vehicles from other states.

A high-level meeting chaired by Punjab Finance and Transport Minister Harpal Singh Cheema, and facilitated by Cabinet Minister Harjot Singh Bains, brought the escalating entry tax dispute with Himachal Pradesh into sharp focus on Monday.

The discussions strongly indicate that Punjab may consider imposing a reciprocal levy on vehicles arriving from the neighbouring hill state.

The meeting, held at Cheema’s office, was attended by representatives of several organisations, including Punjab Morcha, Kirti Kisan Morcha, Bharatiya Kisan Union Behram, and the Azad Taxi Union.

The delegations submitted a detailed memorandum demanding that Punjab respond firmly to the entry tax imposed by Himachal Pradesh on Punjab vehicles under the 1975 Toll Act.

Raising concerns over the financial burden on transporters and daily commuters, the groups urged the state government to introduce a matching tax on Himachal-registered vehicles entering Punjab. They argued that such a move would ensure parity and deter what they termed as unilateral taxation affecting Punjab residents, particularly in border districts with high vehicular movement.

During the meeting, Cheema and Bains reviewed the issue comprehensively, taking into account data related to the thousands of vehicles crossing interstate borders every day.

Officials of the transport department were directed to engage with stakeholders, compile detailed traffic and revenue data, and work out the legal and administrative framework required for implementing a reciprocal taxation policy, the member of the delegation, Gaurav Rana, said.

Sources indicated that the government is examining multiple options, including calibrated taxation slabs and exemptions for specific categories, to balance revenue considerations with public convenience.

The ministers assured the delegations that their concerns were being taken seriously and that any decision would be taken after thorough evaluation.

The issue has gained political traction, with protests intensifying across several parts of Punjab. Transport unions and farmer groups have staged demonstrations, demanding immediate relief and warning of further agitation if the matter is not resolved promptly.

Leaders present at the meeting, including Gaurav Rana, Veer Singh Badwa, Sethi Sharma, Karanveer Singh, Kamaljeet Singh and Kashmir Singh Nangli, expressed cautious optimism after the interaction. They said the government’s willingness to consider reciprocal measures was a positive step but stressed the need for swift action.

“We have been assured that the government will act in the interest of Punjab’s vehicle owners. However, if Himachal Pradesh does not withdraw the entry tax, stronger steps will be necessary,” one of the representatives said.

The dispute originates from Himachal Pradesh’s enforcement of entry tax provisions, which has drawn criticism from Punjab stakeholders who view the move as discriminatory. The matter has now reached the Punjab Assembly, where it is expected to be debated in the coming days amid mounting pressure on the state government.

With tensions continuing to rise and cross-border transport operations facing uncertainty, the Punjab government’s next move will be closely watched. A decision on reciprocal taxation could not only impact interstate travel and trade but also set the tone for how similar disputes are handled in the future.