Vehicle purchase gets costlier as road tax hiked by up to 2%

Rajmeet Singh

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Tribune News Service

Chandigarh, August 22

The cash-strapped Punjab Government has given yet another shock to the people. Days after increasing the collector rates for the registration of properties, it has increased the motor vehicle tax by 0.5 to 2 per cent on privately owned two-wheelers and four-wheelers with immediate effect. An order in this regards has been issued by Transport Secretary Dilraj Singh. The last such hike was made in February 2021.

The State Transport Department targets to earn an additional Rs 70 crore annually by effecting this tax hike. The move comes just ahead of the festival season, when the maximum sales are reported.

Levied on the actual cost of a vehicle, excluding the taxes, buying a four-wheeler costing up to Rs 15 lakh will attract 9.5 per cent tax, against 9 per cent earlier. “Buying a four-wheeler costing Rs 8 lakh will attract an additional tax of around Rs 4,000. Similarly, buying a four-wheeler costing Rs 15 lakh will attract an additional tax of over Rs 7,000,” said a Ludhiana-based auto dealer.

Officials in the Transport Department said the vehicles costing above Rs 15 lakh and up to Rs 25 lakh would attract 12 per cent tax, against 11 per cent charged earlier.

The department has created a new category of high-end premium vehicles costing Rs 25 lakh and above. These vehicles will attract a tax of 13 per cent. Anyone buying a vehicle costing Rs 30 lakh will, therefore, have to shell out an additional tax of Rs 60,000.

For two-wheelers costing up to Rs 1 lakh, the tax has been increased by 0.5 per cent and for those costing between Rs 1 lakh and Rs 2 lakh, the tax has been increased by 1 per cent. A new category has been created for two-wheelers costing above Rs 2 lakh, wherein the tax will be 11 per cent.

Rishi Dada, president of the Punjab chapter of the Federation of Automobile Dealers Associations (FADA), said, “The hike in road tax is unwarranted.”