Motor Vehicle Tax Hike in Tamil Nadu Comes into Effect
Chennai: The motor vehicle tax hike in Tamil Nadu came into effect yesterday, causing concern among vehicle owners and potential buyers. The transport department officials announced the implementation of the tax hike, which was approved by the Governor and published in the gazette on the 6th and 7th of this month, respectively.
The new tax rates, as per the bill passed on the closing day of the legislative session on the 11th of last month, have seen a significant increase. For two-wheelers, the lifetime tax has been changed to 10 percent for vehicles up to Rs.1 lakh and 12 percent for vehicles purchased for more than Rs.1 lakh. Additionally, old two-wheelers will now be taxed at 8.25 per cent (not exceeding Rs. 1 lakh) and 10.25 per cent for those above Rs. 1 lakh. Similarly, lifetime tax for 1 to 2-year-old two-wheelers, not exceeding Rs.1 lakh, has been fixed at 8 percent and 10 percent for those above Rs.1 lakh.
When it comes to cars, the tax rates have also seen a significant increase, with 10 percent levied on vehicles priced up to Rs 10 lakh, and 15 percent on vehicles priced above Rs 10 lakh. The revised rates now stand at 12 percent for cars priced up to Rs.5 lakh, 13 percent for cars priced between Rs.5 lakh to Rs.10 lakh, 18 percent for cars priced between Rs.10 lakh to Rs.20 lakh and 20 percent for cars priced above Rs.20 lakh.
The increase in tax is expected to raise the prices of two-wheelers by up to 5 percent, with buyers of low capacity vehicles having to spend an additional Rs 7,000 to Rs 8,000 plus GST. Auto dealers have expressed concern over the impact of the tax hike on the prices of cars, heavy vehicles, and tourist vehicles.
The implementation of the tax hike has been met with mixed reactions, with some expressing disappointment over the increased financial burden, while others acknowledge the need for additional revenue for the state government.