Bhubaneswar: A state Cabinet meeting headed by Chief Minister Naveen Patnaik Saturday decided to slash taxes on luxury cars and air-conditioned buses. The meeting held at the Secretariat here has decided to amend the Odisha Motor Vehicle Taxation Act, 1975, to reduce taxes on luxury cars.
Chief Secretary Aditya Prasad Padhi told newsmen car owners will have to pay a one-time tax of 6 per cent on vehicles costing up to Rs 5 lakh. Similarly, a one-time tax of 8 per cent will be levied on cars costing Rs 5 lakh to Rs 10 lakh and 10 per cent tax on cars costing above Rs 10 lakh.
The state government has been collecting 6 per cent, 8 per cent, 10 per cent, 12 per cent and 20 per cent on cars costing up to Rs 5 lakh, Rs 5-10 lakh, Rs 10-20 lakh, Rs 20-40 lakh and above Rs 40 lakh respectively since November 21, 2017, Padhi said.
However, the state reduced taxes on luxury cars after noticing that collections had gone down by about 75 per cent since November, 2017. “The luxury vehicle owners started buying vehicles from neighbouring states where the registration charges were less; thereby the ultimate aim of government to raise the state’s motor vehicle revenue was defeated,” Padhi said.
After the taxes were enhanced, about 600 vehicles costing over Rs 20 lakh each were registered in the state and the number of cars went down to 70 in between November 21 and March 31, said an official of Transport and Commerce department.
Similarly, the Cabinet has decided to reduce the taxes on AC deluxe & sleeper buses and fully built AC sleepers by 10 per cent. The government has been collecting 30 per cent tax on AC deluxe & sleeper category buses and 50 per cent on fully built AC sleeper buses, said the Chief Secretary.
Further, the government has also decided to reduce the rate of tax on buses transporting standing passengers from 50 per cent to 25 per cent.
PNN
