The Tamil Nadu transport department has decided to hike registration taxes for new vehicles. Registration cost will now go up by 5 percent. The existing taxe structure was last revised in 2008 for two-wheelers and in 2010 for four-wheelers.
With the new tax system, two-wheelers that cost up to Rs 1 lakh will attract 10 percent tax, while those costing over Rs 1 lakh will be charged 12 percent as tax. This means that new motorcycles that are over 150cc will become dearer by Rs 7,000 to Rs 8,000.Â
As per the existing tax structure, the transport department charges 8 percent of the vehicle cost as road tax, which is valid for 15 years. For four-wheelers, the authorities charge 10 percent for cars that cost up to Rs 10 lakh and for cars above Rs 10 lakh, the department charges 15 percent.
With four-wheelers, the tax system gets pricey, as with the newly proposed structure, cars up to Rs 5 lakh will attract 12 percent tax, while those under Rs 10 lakh will be charged 13 percent tax, and those costing between Rs 10 and Rs 20 lakh will have to pay 15 percent tax. For cars costing over Rs 20 lakh, the tax will be 20 percent of the vehicle’s cost.
The Tamil Nadu transport department earned a revenue of Rs 6,674.29 crore in 2022-23, and the new structure proposed by the department is expected to add another Rs 1.000 crore in revenue. Taxes for commercial and transport vehicles are also set to see a hike.
When The Financial Express reached out to dealers, the proposed tax hike did not sit well with them as most say sales have already taken a hit in many ways, including insurance costs, vehicle price hikes, waiting period, and the boom in the used vehicle industry.
However, some dealers welcome the price hike as they say the buying power of customers has gone up, pointing towards the increase in two-wheelers in the 350cc and above segment and the number of luxury cars on the road.
