LIFETIME TAX NOT FOR LIFE

LIFETIME TAX NOT FOR LIFE
Temporary migrants to the state have to pay for bringing their vehicles even for a short period. RTOs, meanwhile, give confusing directives
Deepa Bhasthi | TNN

Bangalore: You use the roads, you pay for them. Fair enough. But what is irking several thousands of temporary migrants in Karnataka is the lifetime tax on vehicles that they are being made to pay, even for being in the state for a short period.
Every state, including Karnataka, mandates that vehicles owners, while migrating from one state to another, pay lifetime tax, despite having done so at the time of purchasing the vehicle. The worst hit are IT professionals who migrate to the city for a few months on a project or on deputation.
The lifetime tax, however, has turned into an annual affair. As per rules under Karnataka Motor Vehicles Taxation Act, 1957, the tax can be refunded from the RTO on proof that the vehicle has been taken to the RTO in another state.
SLAB ON REFUND
Despite this, a slab on refund exists and the vehicle owner often ends up paying lifetime tax every time she/he moves to a different state.
Vehicle owners allege that non-Karnataka registered vehicles are targeted by traffic police for frequent checks. Re-registering each time also involves a lot of paperwork.
Gaurav Aggarwal, who moved to Bangalore from Delhi two months ago for a year-long IT project, transferred his new car to Karnataka, and ended up paying a hefty tax. “What’s the point in calling it a lifetime tax when you are asked to pay up in every state you move to?” Gaurav asked.
MORE HEADACHE
Among the worst hit are professionals on deputation at MNCs who are likely to stay in a state just for a few months. Other concerns include managing the huge amount that can’t be met without bank loans.
These loans are difficult to get as vehicle owners often don’t have a permanent address. Re-registering of the vehicle also decreases its re-sale value and insurance cover.
Joint commissioner (enforcement-South) D Vijaya Vikram said tax is levied for using roads in the state.
“A percentage of the tax can be refunded once the owner gives proof of migration to another state. For instance, if the vehicle has been in Karnataka for two years before migration, up to 89% of tax paid will be refunded,” he explained.
RUNNING AFTER DOCUMENTS
But what about those who come to the state for a short period (in months)? Vikram said they can produce “relevant documents” to be exempted from tax, showing that they will be in the state for a few months. On what these “relevant documents” are, he said each case is different.
“It’s up to the owners to convince transport officials of the short duration of their stay,” Vikram added.
Defence personnel and certain sections of central government employees are exempted from this rule.
LIFETIME TAX SLAB IN THE STATE For vehicles priced Rs 5 lakh and below — 12% Between Rs 5 lakh and Rs 10 lakh — 13% Above Rs 10 lakh — 16% WHAT THE ACT SAYS
Under Section 7 of Karnataka Motor Vehicles Taxation Act, it is the RTO’s discretion to issue order for refund of lifetime road tax on submission of documents — change of address or migration of vehicle. In case of taking the vehicle outside the state, the tax refund will be considered after receipt of proof for having effected such a change
NO SMOOTH DRIVE IT professionals who move to Karnataka for short periods to work on projects are the worst hit Another problem area is on tax refund Each RTO has to be convinced by vehicle owners on the authenticity of their case to be eligible for refund Temporary residents have no permanent address; re-registering vehicles decreases their resale value and insurance cover