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This new cess will be levied on non-transport vehicles during registration and is in addition to the existing cess under the Motor Vehicles Act of 1988.
Karnataka already imposes one of the highest motor vehicle taxes in India. (Representational Image)
The Karnataka Assembly has approved a new bill to charge an additional cess of Rs 500 on private two-wheelers and Rs 1,000 on cars during registration.
Despite opposition protests, the bill was passed on 17th December, as per Money Control.
The Karnataka Motor Vehicles Taxation (Second Amendment) Bill, introduced by Law and Parliamentary Affairs Minister HK Patil, will see the additional funds directed to the Karnataka Motor Transport and Other Allied Workers Social Security and Welfare Fund, which benefits bus, cab, and auto-rickshaw drivers.
The new cess will be collected during the registration of non-transport vehicles. It will be added to the existing cess under the Motor Vehicles Act of 1988.
Karnataka already collects one of the highest motor vehicle taxes in India. The state currently imposes an 11 percent cess on taxes under the Motor Vehicles Act, with 10 percent of it used for infrastructure projects, investments in Bangalore’s Mass Rapid Transit System, and the Chief Minister’s Rural Road Development Fund. The remaining 1 percent is allocated to the Urban Transport Fund.
Additionally, a 3 percent cess is charged on commercial vehicles (yellow board), which also goes into the same welfare fund for transport workers.
This decision aims to improve the welfare of public transport workers but has sparked debate over the rising cost of vehicle ownership in the state.
