BENGALURU: The Karnataka Assembly on Wednesday passed The Karnataka Motor Vehicles Taxation (Amendment) Bill, 2026, to attract vehicles heading to neighbouring states for registration due to tax burden. Law and Parliamentary Affairs Minister H K Patil presented the Bill.
The Bill, if it becomes an Act, significantly reduces the existing tax rate per seat for contract vehicles carrying more than 12 passengers and sleeper coach buses registered in the state by Rs 1,000 respectively. Currently, vehicles carrying more than 12 passengers and sleeper coach buses running for hire are taxed at Rs 3,500 per seat and Rs 4,000 per seat, respectively.
Now, it has been reduced to Rs 2,500 and Rs 3,000 respectively. This is because, compared to the state, vehicle registration fees and taxes in Puducherry, Arunachal Pradesh, and other states are very low.
Therefore, thousands of vehicles were registered in states with low taxes and were operating in Karnataka. This is also allowed under the All-India Tour Permit of the Central Motor Vehicles Act.