West Bengal announces ‘lifetime tax’ on cars

Discussion in 'Politics & Society' started by Zebra, Sep 2, 2012.

  1. Zebra

    Zebra Senior Member Senior Member

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    2 Sep, 2012, 05.55AM IST, TNN

    KOLKATA: The state government on Friday announced the rates of lifetime tax that will allow car owners to pay the tax just once when purchasing the vehicle. The tax will be valid as long as the car lasts. Owners of cars already registered will also have the option to pay "lifetime tax".

    The initiative is meant to help the cash-starved government mop up additional resources. But dealers fear it will lead to a drop in sales of small cars with prospective buyers postponing their decision since down payment will go up significantly.

    Though the lifetime tax is an option, the rates are intended to encourage most buyers to opt for it as the onetime tax payable every five years will be cumulatively a lot higher than lifetime tax. Owners of high-end cars are likely to persist with onetime tax as they usually changetheir carsevery twoto three years.

    The rates, implemented through West Bengal Additional Road Tax (Amendment ) Bill, will come into effect from September 3.
    Responding to concerns of car owners that it would lead to major loss when selling the car, transport secretary BP Gopalika insisted that the tax rate could be adjusted against the resale price.

    For a small car priced at Rs 4 lakh (tentatively calculated on the car's engine capacity measured in cubic capacity or cc), the existing tax rate is approximately Rs 20,000 for five years. This will increase to Rs 22,000, while the lifetime tax will be Rs 40,000 or 10% of the car's price. For a car that costs Rs 10 lakh, the five-year tax that is Rs 35,000 now, will increase to Rs 45,000. The lifetimetax will beRs1lakhor 10% of thecar's price.

    However, details of the existing tax structure are not clear. Owners of cars currently pay tax once every five years, a system that was introduced by the Left Front government around a decade ago to garner more tax.

    While the present system requires annual payment of tax after a car is 15 years old, the government argues the lifetime tax will mean less hassle for car owners as they will have to pay the tax only once, eliminating several components of the existing taxes including music system and air conditioner.

    "At present, if people forget to pay the tax or accidentally miss the deadline, the penalty is 100%. This can be avoided by paying a lifetime tax," said Gopalika. The new regulation is meant for two wheelers, four wheelers and omnibuses with seats up to 14 and not registered as a transport vehicle.

    West Bengal announces ‘lifetime tax’ on cars - The Economic Times
     
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  3. Zebra

    Zebra Senior Member Senior Member

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  4. Known_Unknown

    Known_Unknown Devil's Advocate Stars and Ambassadors

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    WTF. I didn't know in WB you had to pay a tax every 5 years on the same car! What a ridiculous notion!
     
  5. The Messiah

    The Messiah Bow Before Me! Elite Member

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    Its 15 years in delhi.
     
  6. Known_Unknown

    Known_Unknown Devil's Advocate Stars and Ambassadors

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    Why? How does that make sense? Cars depreciate in value over time. Paying a fixed tax means that the tax rate actually goes up astronomically! Also, what is this tax called? An "ownership tax"? It's sounds totally unfair, unnecessary and a money grab. Taxes on individuals should be minimized as much as possible, not increased to ridiculous levels to support wasteful expenditure by the government!
     
  7. parijataka

    parijataka Senior Member Senior Member

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    Same in other states, 15 years is considered `lifetime` for vehicles and one pays `lifetime` tax.
     
  8. Ray

    Ray The Chairman Defence Professionals Moderator

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    A good way to fill up the empty coffers.

    5 years tax is a better option because when one is selling the car, he would not have wasted money on tax for the period that the car would be someone else, it having been sold.

    What if a car meets an accident and it is a total loss? Again waste of money for the period that the tax paid not being used.

    I am not too hot on these subjects, but sure would appreciate if someone could give out the pros and cons.
     

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