BENGALURU: The practice of registering luxury cars in the Union Territory of Puducherry, as a measure of tax avoidance, will now be nipped in the bud as the Transport Department has decided to make it tougher for buyers of these vehicles to obtain temporary registration, a move crucial to taking the vehicle out of Karnataka to Puducherry for registration. The decision was taken after officials from Puducherry pointed out that they could not deny registration for vehicle owners who showed valid residence documents within their jurisdiction.
On Friday, the issue was highlighted by representatives of the state to their counterparts in the union territory at a meeting of the South India Transport Council, held in the city. The council includes officials and the ministers of all southern states and union territories. “While Karnataka charges up to 18 per cent as road tax, Puducherry charges much lesser. A car costing one crore would attract tax of around `1 lakh in Puducherry and around `18 lakh in Karnataka. This is why people head there to register their vehicles,” a senior Transport Department official said.
The method for this is simple. Purchasers can obtain a temporary registration from the Karnataka RTO which allows them to use their vehicle on the roads for a period of 30 days. They then head to Puducherry and apply for registration there by submitting documents showing that they are residents of the Union Territory. These are usually forged or falsified as the RTO has a long list of acceptable address proof documents. Once registered, they then bring the vehicles back into Karnataka.
In the past two years, the Government has started strictly enforcing the rule that vehicles which ply in Karnataka for more than 1 year, have to pay local road tax. However, inspite of this, the issue of registration in Puducherry continues to be a problem. “We decided to not issue the temporary registration at any of our RTO’s. This will ensure that the car does not leave the state and will have to pay road tax at the correct rates,” the official said.