Government retracts its proposition to impose 10% road tax

This decision followed opposition from members of legislative assembly

Imposing tax would run against promoting vehicles for environmental reasons

On Wednesday(December 13), the government retracted a proposition to impose a 10% road tax on electric vehicles priced above Rs 20 lakh.

This decision followed bipartisan opposition from members of the legislative assembly who argued that such a tax would not only place an additional burden on buyers but also act as a deterrent for manufacturers.

Despite the already elevated costs of electric vehicles, imposing a tax would run counter to the objective of promoting these vehicles for environmental reasons. The withdrawal of the proposal came after consultations with the chief minister and industries minister.

Transport Minister Ramalinga Reddy, while introducing an amendment to the Karnataka Motor Vehicles Taxation Act, explained that the government had initially suggested the tax to offset revenue losses resulting from rescinding the lifetime tax collection on specific categories of commercial and passenger vehicles.

CN Ashwath Narayan of the BJP emphasized that electric vehicles are already expensive, and introducing a new tax would further strain buyers. He underscored the global trend of governments promoting electric vehicles due to environmental considerations, arguing that imposing a tax would undermine this purpose.

In response to the appeal from senior Congressman RV Deshpande to abandon the proposal, Reddy engaged in a brief discussion with Chief Minister Siddaramaiah and Industries Minister MB Patil, leading to the withdrawal of the tax proposal.