The Karnataka government has adopted a new bill that would increase automobile registration prices in the state. On March 6, Governor Thaawarchand Gehlot approved the Karnataka Motor Vehicle Taxation (Amendment) Act, 2024, which was then published in the Gazette.
The new legislation would levy an extra 3% charge on transport vehicles, with the revenues going to the Karnataka Motor Transport and Other Allied Workers Social Security and Welfare Fund. Furthermore, the government now has the ability to charge a lifetime tax on electric cars. Electric cars, jeeps, omnibuses, and private service vehicles that cost more than Rs 25 lakh would be subject to a 10% registration fee. This is the first time the state has slapped a tax on electric cars.
Presently, Karnataka already imposes some of the highest road taxes in the country, ranging from 13 per cent to 20 per cent. The additional 3 per cent tax on transport vehicles will further escalate the cost of vehicle ownership.
Governor Gehlot also approved the Karnataka Motor Transport and Other Allied Workers’ Social Security and Welfare Act, 2024, on March 6. This legislation aims to provide social security and welfare measures for workers in the transportation sector.
The law applies to workers employed in motor transport companies, garages, workshops, and similar establishments recognized by the state government. Workers are defined as those engaged in transportation, excluding certain groups such as government employees and managerial staff.
To oversee these measures, the state government will establish the Karnataka State Motor Transport and Other Allied Workers’ Social Security and Welfare Board, comprising members including the Labour Minister and senior officials from the Department of Labour.
Benefits for Motor Transport and Other Allied Workers (MTOAW) include accident benefits, educational assistance for children, maternity benefits, pension schemes, and more.
In a related development, the Karnataka High Court upheld a decision allowing employees of private companies operating in multiple states to register their vehicles under the Bharat (BH) series. However, the transport department is cautious about promoting BH series registration for private sector employees due to concerns about potential revenue loss.
Introduced by the Union Ministry of Road Transport and Highways in August 2021, the ‘BH-series’ registration facilitates vehicle registration for individuals relocating between states. While available to various government employees, the transport department is wary of extending it to private sector employees, fearing a loss of 5-7 per cent of Motor Vehicle tax per vehicle based on its category or price.
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