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Karnataka Amends Motor Vehicle Taxation Act, EV Faces Lifetime Tax Currently, the state imposes one of the highest road taxes in the country, ranging from 13 per cent to 20 per cent.

By Entrepreneur Staff

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The new amendment in Karnataka Motor Vehicle Taxation Act 2024 empowers the state government to impose a lifetime tax on electric vehicles (EVs).

According to the amendment, "Motor cars, jeeps, omnibuses, and private service vehicles running on electricity, with a vehicle cost exceeding INR 25 lakh, will be subject to a lifetime tax of 10 per cent of the vehicle's cost at the time of registration of a new vehicle."

In March 2016, the Karnataka government exempted all EVs from paying road taxes. However, while Karnataka offers road tax exemption with zero registration fees for EV buyers, other states provide financial subsidies to encourage EVs.

The state government has also increased the registration fee of transport and commercial vehicles. The Act stipulates, "3 per cent additional cess be levied and collected on the transport vehicles for the Karnataka Motor Transport and Other Allied Workers Social Security and Welfare Fund."

This will be applicable for only newly registered transport vehicles (yellow board commercial vehicles) like taxis, buses and auto rickshaws.

Currently, the state imposes one of the highest road taxes in the country, ranging from 13 per cent to 20 per cent.

The Act aims to provide social security and welfare measures to enhance the well-being of motor transport and other allied workers. The Act applies to workmen engaged in motor transport undertakings, garages, workshops, automobile body-building, and similar establishments notified by the state government.

The Act defines a worker as someone employed in a motor transport undertaking or related capacities, excluding certain categories such as government employees and those mainly engaged in managerial or administrative roles.

The state government will constitute a board named 'Karnataka State Motor Transport and Other Allied Workers' Social Security and Welfare Board'. The board includes various ex-officio members, such as the Labour Minister, additional chief secretary/principal secretary/secretary of the Department of Labour, and others. The Act outlines benefits for Motor Transport and Other Allied Workers (MTOAW), including accident benefits, educational assistance for children, maternity benefits, pension schemes etc.

Entrepreneur Staff

Entrepreneur Staff

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