RTA proposal on vehicle tax hike being reworked

HYDERABAD: The state government is treading cautiously on the proposal of the transport department to hike the life tax on motor vehicles by 2 per cent.A few days ago the RTA had sent proposals to the minister suggesting a hike in the life tax on all new motor vehicles. After examining the file and taking into consideration objections from people, transport minister Botcha Satyanaryana sent the file back to the authority asking it to rework the proposals.The life tax at present is 9 per cent of the vehicle cost on two-wheelers and 12 percent on four-wheelers and 14 percent if it is a second vehicle for the buyer. RTA officials have also proposed introduction of life tax on tractors and autorickshaws. At present, the tax on these two categories of vehicles is collected quarterly, ie once in three months.The last time the tax was revised upwards was when K Rosaiah was the chief minister. It was increased from 9 to 12 pc on four-wheelers then.RTA officials estimated that a 2 per cent increase in the life tax on owner-driven four-wheelers would augment government's revenue by Rs 150 crore to Rs 200 crore a year. Over 10 lakh vehicles are being sold per year in the state.Now the minister wants the officials to study the tax structure in other states. He, however, made it clear to the officials, that they should not propose a hike in tax on small cars.They may consider hiking the tax on luxury cars, he suggested. Speaking to Express, the minister said the government would take a decision on the matter after he received the revised proposals.