Karnataka transport department collects Rs 40.2 crore in taxes, fines from other-state vehicles

Karnataka Transport Department earlier targeted high-end vehicles but is now cracking down on all vehicles registered outside the state that are evading taxes.

Karnataka transport department has collected a total of Rs 40.2 crore from other-state vehicles through enforcement drives conducted across Bengaluru from March 1 to March 20.

Transport department officials said they have decided to intensify the crackdown on vehicles registered outside Karnataka but plying in Bengaluru without proper tax payments and permits.

According to records accessed by Moneycontrol, enforcement teams booked 544 cases and seized 244 vehicles during the drive. "A total of Rs 39.8 crore was collected from unpaid taxes, while Rs 3.5 lakh came from fines", a senior transport department official.

Among the regional transport offices (RTOs), Electronics City recorded the highest collection at Rs 11.7 crore, followed by Bengaluru East with Rs 9.4 crore and KR Puram with Rs 3.7 crore.

Transport Commissioner AM Yogeesh told Moneycontrol: "Initially, we targeted high-end vehicles, but later all vehicles were covered in the enforcement drive. The majority of these vehicles are registered in Union Territories like Delhi, Puducherry, and Daman & Diu, as well as other states."

Also, read: Karnataka registration scam: 1,471 vehicles evade Motor Vehicle tax at Bengaluru Central RTO, cause over Rs 15 crore loss to state exchequer

At present, Karnataka imposes the highest road tax for non-EVs in the country. For cars below Rs 5 lakh, the tax is around 13 percent of the actual price. For vehicles priced between Rs 5 lakh and Rs 10 lakh, it is 14 percent. For those between Rs 10 lakh and Rs 20 lakh, the tax is 17 percent, and for cars costing above Rs 20 lakh, it is 18 percent.

A transport department official said that to evade Karnataka’s high road tax, many motorists purchase luxury vehicles from other states and use them here, causing significant revenue loss to the state exchequer.

Motor vehicle tax is one of the government’s major revenue sources, and authorities have warned of continued action against violators to prevent further losses and ensure road safety.

According to the Motor Vehicle Rules, a vehicle cannot ply with another state's registration number beyond 11 months from the date of migration. After this period, the owner must re-register the vehicle in Karnataka.

On September 15, 2021, the Centre rolled out the BH-series registration to promote the ease of vehicle transfer. Currently, this registration is allowed only for new vehicles. Under the BH-series registration scheme, vehicles are mainly issued to central government employees (PSUs), All India Services officers (IAS, IPS, IFS), and nationalised bank officials.

It may be recalled that Drive Without Borders, a Facebook group campaigning for ‘one nation, one tax’, won a two-year legal battle against the Karnataka transport department's 2014 rule mandating the payment of lifetime road tax within 30 days of entering the state. The Karnataka High Court quashed this rule in 2016.

Also, read: Karnataka to impose 3% additional cess on newly registered transport vehicles; lifetime tax on EVs above Rs 25 lakh