Uniform 6% Road Tax on Vehicles Soon Across India

The Government recently suggested that the states should levy uniform 6 percent one-time road tax on sales price of cars, taxis and two-wheelers, unlike the present system of levying taxes varies from states to states. The Union Transport Minister in the council meeting said, most of the states have agreed to impose a minimum 6 percent as one-time road tax on the sales of the vehicles. This means that states can impose higher tax but it should not be less than 6 percent.

At present, the road tax levied in different states varies from 2 percent to 18 percent. This difference in tax amounts leads to vehicle buyers migrating to the states with the lower tax rates. Several states have urged government to make uniformity in the tax slab in order to ensure their revenue from road tax on vehicles is not snatched by neighboring states.

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