GoM proposes 'One Nation One Tax' for commercial vehicles

The Group of Ministers (GoM), constituted by the Union Road Transport and Highways Ministry, has proposed “One Nation One Tax” policy for seamless movement of commercial vehicles across the country.

“In order to ascertain seamless transportation of tourist vehicles and goods trucks, a consensus emerged that a composite annual fee model be implemented throughout the country by adopting One Nation One Tax policy,” the GoM Chairman Yoonus Khan said at a press conference.

The two-day meeting of the GoM concluded on Thursday.

Khan, who is also the Transport and PWD Minister of Rajasthan, said that a committee has been formed with the transport secretaries as their members to suggest different modalities for the same and submit the report within 15 days.

“As taxation is related to Finance Ministry, we will raise the matter in the next meeting of the GST Council next month. If it becomes fruitful, then we hope to implement the policy after one month of that,” he added.

Khan said the GoM also noted that variation of taxes on private vehicles within different states should be minimised so that people do not tend to go for registration of their vehicles in lower tax jurisdictions.

“It was also agreed that no tax be realised in case a private vehicle migrates from one state to another owing to relocation of vehicle owner,” he added.

In its interim report, the GoM recommended that motor vehicle taxes should be charged by all states on the basis of invoice price of the vehicle and a lifetime tax for 15 years should be charged for personal vehicles in order to harmonise the rates of road tax.

It suggested eight per cent road tax for vehicles priced below Rs 10 lakh, 10 per cent for Rs 10-20 lakh and 12 per cent for those above Rs 20 lakh category, while an additional two per cent has been suggested for diesel vehicles and a rebate of two per cent for electric vehicles.

On issues pertaining to hassles in renewal of license, variation in renewal rates among states, promoting public transport and shared mobility and environment friendly transport like e-vehicles were deliberated and consensus made out to achieve all the above objectives, Khan said.

The GoM reached a consensus that states will undertake a sustained road safety campaign throughout the year to curb delinquent driving and halve fatalities by 2020 and a committee was formed to examine and frame a National Road Safety Policy and Code.

The report said: “The group noted that GST has been a game changer for bringing certainty in the tax treatment and provided a level playing field to all the countrymen.

Similarly, uniform road tax will be immensely helpful to curb the menace of tax evasions by registering the vehicles in low tax jurisdictions and then plying the vehicle in another state.”