Cars, two-wheelers to get costlier in Tamil Nadu. Here's why
Tamil Nadu government announced an increase in tax rates for new two-wheelers, cars, and other vehicles. As per a TOI report, this move is expected to raise the overall cost of vehicles in the state.
The tax hike will also impact shared-autos, taxis, and trucks, potentially leading to higher freight and commute expenses.
Under the amended TN Motor Vehicles Taxation Act, 1974, the tax rate for two-wheelers priced above Rs 1 lakh will be raised from 8 per cent to 12 per cent of the vehicle's cost as a lifetime tax. This means that buyers who previously paid Rs 9,600 rupees as tax will now have to pay Rs 14,400.
Similarly, cars priced between 5 lakh and 10 lakh rupees will attract an 18 per cent tax, while cars costing Rs 20 lakh or more will have to pay a minimum of Rs 4 lakh as a 20 per cent tax.
These tax increases come in addition to registration charges, green taxes, insurance premiums, and other handling charges that vehicle owners already have to bear when purchasing a new vehicle. Industry experts, such as S Rajvel, the state chairperson of the Federation of Automobile Dealers Association, have expressed concern over these tax hikes.
Rajvel believes that the automobile industry in Tamil Nadu will be adversely affected, especially since neighboring states do not impose such high taxes. He also points out that the ex-showroom prices of vehicles have already risen by 40% in the past year, and any further increase in costs will impact sales.
Furthermore, transportation activists like T Sadagopan told TOI that two-wheelers are no longer considered a luxury but have become a necessity for many people, especially due to disruptions in train services and a decline in government bus services in Chennai.
