CHENNAI: Prices of two-wheelers, cars, and tourist cabs may go up by 5% in Tamil Nadu as the Assembly on Wednesday passed a bill to raise road tax on motor vehicles. Transport Minister SS Sivasankar introduced the bill to amend Tamil Nadu Motor Vehicles Taxation Act, 1974, to increase the lifetime road tax for new vehicles, and annual and quarterly taxes for existing vehicles. The bill also proposes to hike green tax and road safety tax for all vehicles. TNIE was the first to report the news on June 19.
Road tax rates for motorcycles were last revised in June 2008 and for cars in June 2010. For tourist cabs and maxi cabs, road tax was last hiked in 2012. The new rates will come into effect after the governor gives his assent to the bill and a notification is issued by the state, sources said. Road tax on two-wheelers with engine capacity of 150 CC and more, typically priced around Rs 1 lakh, will be hiked by 4% from the existing 8%, leading to a price increase of Rs 5,000 to Rs 6,000 per vehicle, including the GST.
For cars in the price range of Rs 20 lakh to Rs 40 lakh, there will be an additional road tax of 5%, up from the current rate of 15%. This will increase their prices by Rs 1.2 to Rs 2.4 lakh. Cars below Rs 10 lakh will see a 3% road tax hike on the existing 10%, resulting in a price increase of Rs 25,000 to Rs 30,000, including GST.
Road safety taxes for bikes, car, and other vehicles also raised
Currently, two-wheeler are charged a uniform road tax of 8% for 15-year period. But as per the new bill, 10% road tax will be imposed on motorcycles that cost up to Rs 1 lakh and for those above Rs 1 lakh, the tax will be 12%.
Likewise, under the existing system, car, tourist motor cab (6 seats+ driver) and tourist maxi cab (12 seats + driver) of value of up to Rs 10 lakh are subjected to 10 % road tax. Car of above Rs 10 lakh are levied 15% tax. Under the proposed bill, car, tourist motor cab and tourist maxi cab valued at Rs 5 lakh will be taxed 12%, those in the range of Rs 5 lakh to Rs 10 lakh will get 13% tax, and vehicles costing between Rs 10 lakh and Rs 20 lakh will be taxed at 18%. Car above Rs 20 lakh will be subjected to 20% tax rate. Road tax for old bikes and car has also been revised as per their age and price.
Minister Sivasankar said, “In order to augment the state’s revenue, the government has decided to amend the TNMVTAC 1974.” Revenue through vehicle registration and road tax was Rs 6,674.29 crore for 2022-23. Green tax for two-wheeler has been increased from Rs 500 to Rs 750 and for non-transport vehicles that are 15 year old, green tax has been hiked from Rs 1,000 to Rs 1,500. For autorickshaws older than seven years, an annual green tax of Rs 250 will be levied, the minister said.
Road safety taxes for motorcycles, car, and other vehicles have also been raised to Rs 375, 2,250 and Rs 3,000 respectively. The old rate was Rs 250 for bikes and Rs 1500 other vehicles. An official said the move is inevitable as rates had not been revised for more than 10 year.