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Modi government preparing to take a big decision in the matter of road tax

Friday - January 24, 2020 4:17 pm , Category : WTN SPECIAL
Modi government to launch “One Nation, One Road Tax” scheme
Modi government to launch “One Nation, One Road Tax” scheme

The Modi Government waits for the approval of the states for the uniform road tax across the country
 

JAN 24 (WTN) - As you know, before GST, there were many taxes in the country that consumers and traders had to pay. But the Modi Government has implemented GST across the country from July 1, 2017, after which consumers and traders have to pay only one tax GST. However, there are four tax slabs in GST i.e. Goods and Service Tax. These tax slabs are 5 percent, 12 percent, 18 percent, and 28 percent. The Modi Government's only objective behind the implementation of GST was to have a uniform tax system across the country.

Modi government, which is famous for taking big and historic decisions, can soon take a new big decision one under which there is a plan to impose uniform road tax across the country at the time of purchase of vehicles. In fact, the Modi government is in the process of implementing the Uniform Road Tax i.e. "One Nation, One Road Tax" and for this; efforts are being made by the Modi government to bring the state governments together. According to the information received from the media, in a meeting held with the central government, some states have approved the implementation of the proposal of this uniform road tax for private vehicles. However, some states have asked to consider the proposal. These states believe that the implementation of the "One Nation, One Road Tax" system will affect their revenue.

For your information, let us know that the road tax has to be paid at the time of registration of any new vehicle. Explain that due to this tax levied with GST, the cost of the vehicle increases. Road tax is different in different states of India i.e. there is more road tax at some states and less road tax at some states. In such a situation, residents of states with higher road tax buy vehicles from those states where road tax is less. But in such a situation, states with higher road tax have to suffer the loss of revenue.
 
For your information, let us know that in the year 2018, the Ministry of Road Transport and Highways had also made a recommendation about road taxis. According to the recommendation of the Ministry of Roads, a road tax at the rate of 8 percent should be imposed on a vehicle worth less than Rs 10 lakh. On the other hand, a vehicle worth 10 to 20 lakh rupees should be taxed at the rate of 10 percent. At the same time, a tax at the rate of 12 percent should be imposed on the vehicle beyond the cost of 20 lakh rupees.
 
As far as the imposition of road tax by states is concerned, each state has a different formula for imposing road tax. In some states, road tax is levied depending on the making, model, engine and seating capacity of the vehicle, while in some states road tax is levied according to the selling price of the vehicles. By the way, at the time of vehicle registration, road tax is levied at the time period of 15 years. Although it is good to propose the Central Government to impose a road tax at a uniform rate on vehicles across the country, it is feared that there may be some financial difficulties in changing the rate of road tax.
 
By the way, the government argues that the "One Nation, One Road Tax" policy will provide relief to the buyers, because in some states the road tax price is higher than other states, in such a situation, there is a uniform road tax in the entire country those who buy will get relief. At the same time, the government says that the implementation of the uniform road tax scheme will reduce the impact on the revenue of the state governments.
 
If there is a uniform road tax in the entire country, then more road tax paid states residents will not go to other states to buy vehicles from the other state and they will buy a vehicle from the same state. Now it has to be seen how many state governments agree on the "One Nation, One Road Tax" of the Modi government, and if this scheme is implemented, then it will have to be seen whether it benefits the customers or not, and that too whether the implementation of this policy compensates the revenue loss to some states or not?