The Karnataka government has given the green light to a new law that will make registering vehicles in the state more expensive.
Governor Thaawarchand Gehlot approved the Karnataka Motor Vehicle Taxation (Amendment) Act, 2024, on March 6. The law was officially published in the gazette on March 7, as reported by Money Control.
Karnataka Motor Vehicle Taxation (Amendment) Act, 2024: What Does It Says?
Under this new law, a 3 percent extra fee will be charged on transport vehicles. This money will go into the Karnataka Motor Transport and Other Allied Workers Social Security and Welfare Fund.
Additionally, the government now has the power to impose a lifetime tax on electric vehicles (EVs). If an electric car, jeep, omnibus, or private service vehicle costs more than Rs 25 lakh, a 10 percent tax will be levied on its cost at the time of registration. This is the first time such a tax is being imposed on electric vehicles in the state.
Impact On Prices
Currently, Karnataka already has some of the highest road taxes in the country, ranging from 13 percent to 20 percent. The new 3 percent tax on transport vehicles will make owning a vehicle even more expensive.
The Karnataka Motor Transport and Other Allied Workers’ Social Security and Welfare Act, 2024, was also approved by Governor Gehlot on March 6. This law aims to provide social security and welfare measures for workers in the transportation sector.
Who Does It Apply To?
The law applies to workers in motor transport companies, garages, workshops, and similar establishments recognized by the state government. It defines workers as those employed in transportation, excluding certain groups like government employees and those in managerial positions.
Benefits Of The New Law For Workers
The state government will establish a board called the ‘Karnataka State Motor Transport and Other Allied Workers’ Social Security and Welfare Board’ to oversee these measures. This board will have members including the Labour Minister and senior officials from the Department of Labour.
Benefits for Motor Transport and Other Allied Workers (MTOAW) include accident benefits, educational aid for children, maternity benefits, pension schemes, and more.
BH-Series Registration
In a related development, the Karnataka High Court recently upheld a decision to allow employees of private companies operating in multiple states to register their vehicles under the Bharat (BH) series. However, the transport department is hesitant to promote BH series registration for private sector employees, fearing a loss of revenue.
Introduced in August 2021 by the Union Ministry of Road Transport and Highways, the ‘BH-series’ registration eases vehicle registration for individuals relocating between states.
While made available to various government employees, the transport department fears the potential revenue impact if extended to private sector employees, estimating a loss of 5-7 percent of Motor Vehicle tax per vehicle based on its category or price.
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