The Transport Department of Goa has issued directions to all their inspectors to identify and detain all high-end vehicles which may have been registered through ‘fraudulent means’ outside the state of Goa to save on tax.
The price of the vehicle pan India is almost the same after the implementation of Goods and Services Taxes (GST). However, the road tax which is outside the purview of GST is a state subject and every state levies different amount of road tax. Some states like Goa levy it on the value of the car and its percentage varies while some others do it on engine capacity.
The worst part is that there is a huge disparity in the rates on road tax all over India. In states like Jharkhand, Union territories of Chandigarh and Puducherry the road tax is very low as compared to other states in India. Hence, people buy the luxury car in these places and register there to gain on low road taxes.
For registration of cars a permanent address is required and in many cases it may not be available. There could be some genuine cases also as one could have a business establishment in those states and Union Territories. However, this is resulting in huge revenue loss to the State government both in terms of road tax and State GST (SGST).
“After inquiry we will take up the matter with states and Union Territories to find out whether that vehicle was registered fraudulently to avoid taxes. Following the inquiry and if found guilty, we will file criminal complaint against the violators. As per Section 47 of Motor Vehicle Act if the vehicle remains for more than 12 months in another state then they have to register again. Vehicles registered in Puducherry, Jharkhand and Chandigarh is on our watch list. We are also aware that such vehicle owners have been hiding their high-end cars and have been found using them sparingly at late hours soon after the Department has started this drive,” said Nikhil Desai, Director of Transport.
However, the Karnataka High Court judgment clearly states that any person can use the car of any Indian registration number in any state in the country. The problem is that whether the registration has been done by normal legal ways or not. The Transport Department needs to check whether the car was registered in a proper legal manner with a valid address or not. In Goa, the road tax is 15 per cent of the value of the car which the Auto Dealers are calling it “very high for high-end cars”. The automobile dealers in Goa which have created a direct employment of nearly 8000 people in the state feel that if this trend continues there will be a huge loss to the state.
“We have made a representation to the Transport Department to check this issue. According to me, Goa government needs to do two things in order to stop this revenue loss. First, impound the vehicles which have flouted norms and recover the taxes and second for posterity we should have a re-look at the taxation on the high-end cars and bring down the slab which help us increase the sale of cars and in turn will increase the revenue to the state government. If this happens there will be job creation too,” said the past President of Goa Automobile Dealers’ Association (GADA), Manoj Caculo.
Chairman and managing director of Quadros Motors, Evencio Quadros was candid in saying, “The revenue loss is not only in terms of road tax and state GST. The dealers are also losing in terms of sales. It means it will have a direct impact on jobs too. I would suggest the State government drastically bring down the road tax and encourage sales in the State so that it can garner GST. We may lose a bit in terms of road tax but we will gain it in State GST and this will help create more employment.” Quadros is a member of GADA and the national body Federation of Auto Dealers’ Association.
“According to me the State government should reduce the road tax on the premium cars and help increase sales in Goa. With the GST coming in there is no entry tax or Octroi hence according to my estimates this activity of getting high-end vehicles registered elsewhere may not be happening now as those states and Union Territories have also strengthen their norms and rules. In fact after GST, the local Goan dealers have also got the chance to sell their vehicles outside the state,” said the President of GADA, Prashant Joshi.
