Delhi hikes road tax for luxury cars, high-end bikes

Monday, 24 May, 2010


Driving a car, especially a luxury car or a high-end motorcycle, is set to get costlier in the capital. The Delhi cabinet Monday decided to raise the vehicles' road tax rates in a bid to generate additional revenue for the city government.

According to the revised road tax rates the cabinet cleared with Chief Minister Sheila Dikshit in the chair, two-wheelers costing up to Rs.25,000 will be charged the existing two percent, while two-wheelers costing between Rs.25,000 and Rs.40,000 will now attract four percent road tax and those above Rs.40,000 will be charged six percent.

The rate for cars, priced up to Rs.6 lakh, has been doubled to four percent, while it has gone up to seven percent on those costing between Rs.6 lakh and Rs.10 lakh. Those owning motor vehicles costing Rs.10 lakh would have to pay a road tax of 10 percent.

The new rate will come into force after the issue of a notification.

This will go a long way in restricting purchase of luxury cars and discouraging use of private vehicles in the city, Dikshit told reporters after the meeting.

"The rates have been rationalised to also enhance revenue generation," she said, adding rationalisation of road tax was needed to replace the rates existing for decades.

Dikshit noted that the new rates were rationalised in such a way that there will be marginal effect on purchase of two-wheelers and non-luxury cars.

However, the chief minister said the cabinet decided to retain prevalent rates on public utility vehicles such as public goods careers as it would have adverse impact on common man.

A Delhi government official said the rates prevalent in the neighbouring states were also considered before taking a decision.

The official said about 1,000 new vehicles are registered in the city every day and add to the traffic chaos on roads. There are around 6 million vehicles in Delhi, which has an estimated population of 12 million.

The state cabinet recently also approved a proposal to revise registration fee of properties to generate an additional revenue of Rs.100 crore.

Original news source http://blog.taragana.com/business/2010/05/24/delhi-hikes-road-tax-for-luxury-cars-high-end-bikes-64150/