By Our Reporter
SHILLONG: The Cabinet has decided to slash the revised rates of Motor Vehicles Tax and the rates of Composite Tax on Tourist Vehicles by 25 per cent.
“After due examination of the matter, the Cabinet has decided to give some kind of remission on the revision of the taxes on vehicles. We have decided to reduce the tax on motor vehicles by 25 per cent,” Chief Minister Dr Mukul Sangma told reporters after the Cabinet meeting here on Tuesday.
The Chief Minister said the Transport department had been asked to finalise the rates in accordance with the decision of the Cabinet.
Dr Sangma, however, said that the taxes to be levied on luxury vehicles would remain the same as per the recommendation of the Tax Force for Resource Mobilisation.
He said the taxes for vehicles between Rs 15 to Rs 20 lakh have been fixed at 4.5 percent of the original cost of the vehicle, adding that the taxes for vehicles which cost over Rs 20 lakh have been fixed at 6.5 per cent of the vehicle’s original cost.
Meanwhile, the Chief Minister said that this decision of the Cabinet would have an impact on the overall Plan size of the State.
“We had fixed the Plan size after fixing the State owned resources. The total revenue to be generated by the State would drop following this reduction on the taxes on vehicles,” Dr Sangma said.
Replying to a query, he said with the revision on the rates of the motor vehicles tax, the State was expected to earn a revenue of Rs 46.5 crore annually.
“With this 25 per cent reduction, there would be a decrease in the revenue to be generated through the revision of taxes on motor vehicles,” the Chief Minister added.
The government had earlier said that the revision of rates on motor
vehicle tax was “undertaken after a period of 12 years”. The last revision took place in 1999. The motor vehicle tax and composite tax rates were increased by four to five times. Among others, the annual road tax for passenger taxi carrying four to six persons (three wheelers) was increased to Rs 1,800 from the previous Rs 420.
For local taxis, the annual road tax has been hiked from Rs 460 to Rs 2,600. The road tax for tourist taxis was increased to Rs 4800 from Rs 1,440.
For vehicles with passenger capacity of seven to 12, the road tax was hiked from Rs 3,000 to Rs 5,700. The KSU, Jaintia Student’s Union (JSU) and East Khasi Hills Local Taxi Welfare Association earlier had demanded that the State Government put on the hold the implementation of the notification on the revision of rates of the motor vehicle tax and composite tax. Following this opposition, the matter was again referred to the Cabinet to review this revision. It may be mentioned that the Cabinet on February 10 2011 had approved the proposals contained in the recommendations of the Task Force including the revision of the motor vehicle tax.