Cars to be dearer in Odisha, as govt raises one-time tax

Current tax rate is 5%; under new regime it will be between 6% and 20%, based on price of vehicle

Owning cars is going to be an expensive affair in Odisha with the state government effecting a raise in one-time tax collected on personal vehicles.

The state cabinet today decided to hike the one-time tax factoring in the growing influx of luxury vehicles into the Odisha market. The hike would be done through an amendment in the Odisha Motor Vehicle Taxation Act, 1975. The amendment has been approved as per the recommendations of the expert committee appointed by the government to suggest revenue enhancement measures.

As per the revised tax, cars costing up to Rs five lakh would have to shell out a one time tax of six per cent while those priced in the band of Rs 5-10 lakh would be charged at eight per cent of the vehicle's cost. The one time tax rate has been pegged at 10 per cent for cars in the price range of Rs 10-20 lakh and 12 per cent for cars priced from Rs 20 lakh to Rs 40 lakh. Cars priced beyond Rs 40 lakh would be charged at 20 per cent. At present, one time tax on personal vehicles is collected at the rate of five per cent of the cost of the vehicle or at the rate specified in Schedule III, whichever is higher.

The one time tax has also been enhanced in respect of goods carriages (whose gross weight does not exceed 3000 kg) from five per cent to six per cent.

For tractors and trailers, one time tax of three per cent would be imposed.

The additional revenue gain for the state through hike in one time tax is estimated at Rs 66 crore per annum, said Sanjay Rastogi, secretary, commerce & transport.

The state government has proposed a green tax on vehicles that have crossed 15 years of age. The tax is aimed at discouraging ageing vehicles as they are found to be causing much collateral damage to life and property.