Unjust Taxation: J&K’s Road Tax Policy on GST Component Sparks Controversy, Violates MoRTH Guidelines
||Black and White Digital News ||
||January 16,2025 ||
The Union Territory of Jammu and Kashmir is charging road tax on the Goods and Services Tax (GST) component of the invoice value of motor vehicles. This practice blatantly violates a notification issued by the Ministry of Road Transport and Highways (MoRTH) and imposes an undue financial burden on vehicle owners.
1. Revised Road Tax Policy (2019):
• Under SRO 492, effective August 1, 2019, the J&K government introduced a one-time road tax for motor vehicles.
• The tax rates were set at 9% of the vehicle’s cost for motorcycles above ₹1.5 lakh and 10% of the cost for other vehicles.
2. Clarification by Finance Department (2019):
• The Finance Department mandated that road tax should be levied on the total cost of the vehicle, including the GST component.
3. MoRTH Notification (2021):
• The MoRTH directed that road tax should be calculated based on the basic invoice cost, excluding GST, to avoid a “tax on tax” scenario.
• Despite this, the J&K Transport Department continues to charge road tax on the GST component.
1. Violation of Central Guidelines:
• The Transport Department’s practice contravenes MoRTH’s notification, undermining the directive’s intent to make road taxation fair and uniform across India.
2. Financial Burden on Citizens:
• By taxing the GST component, J&K effectively imposes a “tax on tax”, increasing the cost of vehicle ownership and causing financial hardship for citizens.
3. Inconsistency with Other States:
• In states like Punjab, Gujarat, and Mizoram, road tax is calculated on the basic vehicle cost, excluding GST. J&K’s deviation highlights a lack of parity in taxation practices.
4. Unfair Practices:
• The additional financial burden is raising concerns among vehicle owners and industry experts, who have criticized the policy as arbitrary and unjust.
Implications:
• Economic Impact: The higher cost of vehicle registration discourages purchases, impacting the local automobile sector.
• Erosion of Trust: Citizens perceive this as administrative indifference and a lack of accountability.
• Legal Consequences: The continued violation of MoRTH guidelines could attract legal challenges and demands for refunds.
Recommendations:
1. Immediate Compliance:
• The J&K Transport Department must revise its policy to comply with MoRTH’s directive and exclude GST from the road tax calculation.
2. Policy Review:
• Conduct a comprehensive audit of road tax collections since the MoRTH notification to ensure fairness.
3. Public Awareness:
• Educate citizens about the correct road tax structure and provide clarity on the refund process for overcharged amounts.
4. Accountability:
• Investigate the reasons behind the non-compliance and take corrective action against officials responsible for the lapse.
The J&K government’s current road tax policy is not only a violation of central guidelines but also an unjust financial imposition on citizens. This calls for immediate reforms to align with MoRTH standards and restore public trust in governance.
