Inter-state vehicle transfer to get cheaper: Govt to introduce uniform tax rates

Soon vehicle owners won't need to pay any road taxfor transfer of their vehicle from one state to another in India. In a move aimed at making the process of inter-state vehicle transfer easy, a group of ministers (GoM) constituted by the ministry of road transport and highways has proposed a One Nation-One Tax and One Nation-One Permit proposal.

The GoM, headed by Rajasthan transport minister Yunus Khan and comprising state transport ministers, seeks to find solutions to problems plaguing the road transport sector in the country so as to improve road safety and initiate reforms to facilitate ease of transport.

The GoM observed that a uniform tax structure will put a check on people registering their vehicles in low tax states and running them in other states. According to the new recommendations, vehicle owners will not have to pay any road tax while transferring their vehicles from one state to another. The new proposal will apply to vehicles that are more than two years old. 

The GoM has also recommended a national bus and taxi permit on lines of such permit for goods transport. If the new proposal is accepted and rolled out, it will promote the use of public transport, ease the transfer of vehicles within states across India, and reduce road congestion and its attendant problems.

In a move to promote alternative fuel for vehicles, the GoM had proposed liberalization of the permit system for electric vehicles. Additionally, it has also suggested raising the tax on diesel vehicles by 2 percent while lowering the tax on electric vehicles.

At present, to transfer vehicle from one state to another, the applicant needs to secure a 'no objection certificate (NOC) from the original issuing authority (RTO), re-register the vehicle in the new state, and pay road taxes depending on the taxation of state.