Looking for new sources of Income, Mr. Arun Jaitley introduced the Infrastructure Cess on Motor Vehicles. If you read between the lines, you will notice that the motor vehicles which are exclusively to be used as taxis will be exempted from this cess. Considering that the tax is applicable based on the type of the vehicle, this would effectively be paid while the registration of the vehicle takes place with the Regional Transport Offices.
This rule would come into effect immediately which means that if you are in the process of buying a new vehicle which satisfies the below conditions and is due for registration, be ready to fork a couple of extra thousands.
- Petrol/LPG/CNG driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1200cc – 1%
- Diesel driven motor vehicles of length not exceeding 4m and engine capacity not exceeding 1500cc – 2.5%
- Other higher engine capacity motor vehicles and SUVs and bigger sedans – 4%.
How much would increase the government revenue?
We know the approximate sales of vehicles under each of these categories. Our calculation results in an additional income of Rs. 700 Cr to the government on a monthly basis which would turn up to Rs. 8,400 Cr on an annual basis.
Here are the exempted categories
- Electrically operated vehicles, Hybrid vehicles, Hydrogen vehicles based on fuel cell technology, Motor vehicles which after clearance have been registered for use solely as taxi, Cars for physically handicapped persons and Motor vehicles cleared as ambulances or registered for use solely as ambulance will be exempt from this Cess. No credit of this Cess will be available, and credit of no other duty can be utilized for payment of this Infrastructure Cess.
[wpob id=”2″]
Disclaimer
Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion.
