State to be first to propose a two-slab road tax system

Soon,a resident will have to pay extra road tax when he registers his vehicle in Punjab.

Written by Harpreet Bajwa | Chandigarh | Published: August 9, 2012 2:45 am

Soon,a resident will have to pay extra road tax when he registers his vehicle in Punjab. The cash-strapped state is set to become the first government in the country to propose a two-slab road tax system for vehicles,earning it a revenue of Rs 200 crore.

According to sources,the transport department has proposed that only two tax slabs — 6 and 8 per cent — should calculate tax on vehicles. Currently,there are slabs 2,4,6 and 8 per cent. “The new two slab system will be brought in the next cabinet meeting and likely to be cleared. Following this,the new road tax slabs will be notified by the government. This is being done keeping in view that the Centre had suggested that there should be same road tax rates across the country,’’ said an official.

Last year,the state government had increased road tax in Punjab after the cabinet approved new tax slabs. According to it,one has to pay two per cent road tax on cars costing up to Rs 5 lakh,four per cent on cars costing between Rs 5 lakh and Rs 10 lakh and six per cent on vehicles priced between Rs 10 lakh and Rs 20 lakh. The highest rate of tax is at eight per cent for vehicles costing above Rs 20 lakh. Prior to last year,the road tax charged in the state was at the rate of 2 per cent for four wheelers.

Sources said that once the new proposal is cleared by the cabinet,vehicle registration in the state will be highest in the region,as in Haryana and Chandigarh the minimum slab will be still 2 per cent.

The existing road tax rates in Chandigarh are one of the lowest in the region. Thus,vehicles bought in Haryana,Gujarat and Maharashtra too are registered here. The highest slab in Chandigarh for cars costlier than Rs 20 lakh is 4 per cent,though Punjab and Haryana charge 8 per cent for such vehicles.

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