Wednesday, May 25, 2005
Wednesday, May 25, 2005 |
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Advts: Classifieds | Employment | New Delhi
Sujay Mehdudia
NEW DELHI: As if an alarming decrease in the sales of motor vehicles, especially cars, by almost 45 per cent after the introduction of the new ad valorem tax regime was not enough, the Haryana Government's decision now to drastically bring down road tax on all kinds of vehicles is likely to hit Delhi hard. Not only has the revenue collections of the State Transport Department been hit, the Value Added Tax (VAT) revenue from sale of cars has also gone down. Although the Delhi Government had introduced the new ad valorem tax for vehicles in March this year with the idea of increasing its revenue base, things have not worked according to plan. Car dealers across the Capital are already crying themselves hoarse over the new road tax regime where cars up to Rs. 4 lakhs would have to pay 2 per cent tax and those above Rs. 4 lakhs would have to shell out 4 per cent tax on the value of the car. This had led to a substantial increase in the cost of the vehicles with those planning to buy a new car having to pay anything between Rs. 8,000 to Rs. 2,000 extra for vehicles costing between Rs. 4 to Rs. 5 lakhs. Earlier, they had to pay around Rs. 4,800 for this category of vehicles. This has resulted in people buying vehicles from neighbouring towns like Gurgaon, Faridabad to save on tax. The higher the cost of the vehicle, the more was the saving in the neighbouring State. As if this was not enough, the Haryana Government dealt another shock to the Delhi Government when two days ago it went ahead and drastically reduced the road tax on vehicles. Under the new regime, Rs. 2,000 would be charged from vehicles costing up to Rs. 4 lakhs, 1 per cent of the vehicle cost up to Rs. 10 lakhs and 1.5 per cent on vehicles costing above Rs. 10 lakhs.
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