Road Ministry for hike in minimum road tax to 6 per cent

NEW DELHI: The Road Ministry today proposed an increase in the minimum road tax charged by states to a uniform 6 per cent of the sales price of a vehicle at a meeting of the National Transport Development Council.

At present, the road tax charged by the states on vehicles varies from 2 per cent to 18 per cent. While some states levy a lifelong road tax, annual levies prevail in others. Delhi also charges parking fees as part of tax.

The proposal for a minimum road tax of 6 per cent of the sale price of a vehicle was mooted by the Ministry of Road Transport and Highways in a meeting of the National Transport Development Council here today.

"There should be at least 6 per cent road tax for the vehicles across states, they (states) can charge a higher rate, but not less than 6 per cent," sources in the Road Ministry said.

However, the Union Territory of Chandigarh is believed to have opposed a higher tax as it feels the move may have some political implications.

This difference in road tax is the reason some people buy vehicles from different states.

The committee also discussed other issues hampering the sector. Currently, motor vehicle taxation is a state subject and the central government can only be an advisor in the matter.