The road tax paid during the registration of a vehicle is decided by a state’s own formula. This creates non-uniformity in road tax across state. While some states have high road tax others have quite low.
‘One Nation One Road Tax’ aims to curb this and wants to set a uniform road tax rate across the country. Since the road tax directly impacts the vehicle’s price buyers are expected to have a relief with the move.
State governments are however reluctant towards the idea. The reason being that the move would hit revenue collections of the state governments. A group of ministers on transport had earlier recommended a uniform road tax structure. They said that the tax shall be charged based on the invoice price of a vehicle.
The uniform road tax has been a long-standing demand of the automobile industry. At a time when the sector is facing a massive slowdown, the demand again got pace. However, it would all depend on the Center’s ability to convince the states.
Inputs from Livemint