[sustran] Re: Delhi hikes road tax for luxury cars, high-end bikes

Simon Bishop simon.bishop at dimts.in
Tue May 25 16:30:12 JST 2010


Hi,

It's good news that cars are becoming more expensive. I wonder why they didn't consider a yearly tax, or, better still a mileage-based tax that would deter usage?  

Under the existing set up, once you have bought the car/motorcycle you have every incentive to use it as much as possible since the fixed cost of tax gets lower the more you drive.  

The zero per cent increase in low price motorcycles I fear will not deter purchase amongst those currently using public transit and will continue to encourage a shift away from this mode - down 19% from 60% of mode share to 41.5% of mode share in a little less than 7 years. 

Would be good to know the appraisal impacts of their new hike if anyone can share with Sustrans.  Just what is the 'marginal effect' Dixit is referring to?

-----Original Message-----
From: sustran-discuss-bounces+simon.bishop=dimts.in at list.jca.apc.org [mailto:sustran-discuss-bounces+simon.bishop=dimts.in at list.jca.apc.org] On Behalf Of Vinay Baindur
Sent: Tuesday, May 25, 2010 10:24 AM
To: Hasire Usiru; CAF2
Subject: [sustran] Delhi hikes road tax for luxury cars, high-end bikes

Delhi hikes road tax for luxury cars, high-end bikesIANS, May 24, 2010,
05.25pm IST
http://timesofindia.indiatimes.com/city/delhi/Delhi-hikes-road-tax-for-luxury-cars-high-end-bikes/articleshow/5969117.cms

NEW DELHI: Driving a car, especially a luxury car or a high-end motorcycle,
is set to get costlier in the capital. The Delhi cabinet on Monday decided
to raise the vehicles' road tax rates in a bid to generate additional
revenue for the city government.

According to the revised road tax rates the cabinet cleared with Chief
Minister Sheila Dikshit in the chair, two-wheelers costing up to Rs.25,000
will be charged the existing two percent, while two-wheelers costing between
Rs.25,000 and Rs.40,000 will now attract four percent road tax and those
above Rs.40,000 will be charged six percent.

The rate for cars, priced up to Rs.6 lakh, has been doubled to four percent,
while it has gone up to seven percent on those costing between Rs.6 lakh and
Rs.10 lakh. Those owning motor vehicles costing Rs.10 lakh would have to pay
a road tax of 10 percent.

The new rate will come into force after the issue of a notification.

This will go a long way in restricting purchase of luxury cars and
discouraging use of private vehicles in the city, Dikshit told reporters
after the meeting.

"The rates have been rationalised to also enhance revenue generation," she
said, adding rationalisation of road tax was needed to replace the rates
existing for decades.

Dikshit noted that the new rates were rationalised in such a way that there
will be marginal effect on purchase of two-wheelers and non-luxury cars.

However, the chief minister said the cabinet decided to retain prevalent
rates on public utility vehicles such as public goods careers as it would
have adverse impact on common man.

A Delhi government official said the rates prevalent in the neighbouring
states were also considered before taking a decision.

The official said about 1,000 new vehicles are registered in the city every
day and add to the traffic chaos on roads. There are around 6 million
vehicles in Delhi, which has an estimated population of 12 million.

The state cabinet recently also approved a proposal to revise registration
fee of properties to generate an additional revenue of Rs.100 crore.
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