HYDERABAD: The state government will begin levying a one-time Road Safety Cess from March 1, increasing the cost of purchasing new vehicles.
The measure aims to mobilise dedicated funds to strengthen traffic management systems and improve accident prevention infrastructure across the state.
The levy follows the amendment of the Telangana Motor Vehicles Taxation Act, 1963, which received the Governor’s assent in January and will come into force from March 1. Under Section 3-C, a one-time cess will be collected at the time of registration of new vehicles.
Auto rickshaws exempted from road safety cess
The proceeds will be credited to a dedicated, non-lapsable fund and utilised exclusively for road safety initiatives, including strengthening traffic regulation systems, upgrading road infrastructure and implementing accident prevention measures.
As per the amendment, motorcycles will attract a cess of Rs 2,000 at the time of registration, while Light Motor Vehicles (LMVs), excluding tractors and tractor-trailers used for agricultural purposes, will be charged Rs 5,000.
All other transport and non-transport vehicles, including cars and larger passenger vehicles, will be required to pay Rs 10,000. However, passenger three-wheeled contract carriages such as auto-rickshaws with a seating capacity of four to seven persons have been exempted from the cess.
Apart from introducing the Road Safety Cess, the amendment also revises the tax structure for four-wheeled Light Goods Carriages. New vehicles in this category will be taxed at 7.5% of the vehicle cost at the time of registration. Vehicles purchased in other states and subsequently registered in Telangana will be taxed based on their age, with rates ranging between 4% and 6.5% of the vehicle cost.
Existing vehicles already registered and in use within Telangana will continue to pay the prevailing quarterly tax. Old in-use three-wheeled goods carriages have been exempted from the revised tax provisions.
With the Road Safety Cess and revised tax rates set to take effect from March 1, prospective vehicle buyers across Telangana are expected to face higher registration costs. While the government maintains that the additional levy will create a dedicated pool of funds of about Rs 250 crore for improving road safety, the move is likely to add to the financial burden on new vehicle purchasers.