Revised taxes for new vehicles hit sales hard, dealers await promised reduction

GANGTOK, 25 May: “A 100 percent increase in annual taxes for private vehicles is just too much. And then there is the high registration fees. This has prompted people here to buy & register their vehicles in neighbouring West Bengal instead because the costs work out substantially lower. I think the government should give this matter a big rethink since much of the State’s revenue is now being lost to vehicle dealers in Siliguri,” contended Ajeet Oberoi, the dealer for Yamaha motorcycles in Sikkim, who adds that ever since the notification announcing the new tax structure came into effect, he has lost 50 percent of his business.
The increased rate of vehicular taxes is proving a big “setback” for local entrepreneurs, dealers and buyers since many customers are now purchasing vehicles outside the state and using WB registration plates since the taxes in Sikkim are markedly higher.
According to official sources the new trend has also led to a fall in revenue for the state’s motor vehicle’s department as well.
Pramod Dalmiya, proprietor Sikkim Motors and the Hyundai dealer here, informs that a person purchasing a Rs.10 lakh luxury vehicle like a Scorpio or a Xylo, has to shell-out an extra 1 lakh in taxes.
“We have lost about 10 to 15 percent of our business in the past two months which is bad news for the State exchequer as well since even the 12 percent VAT which the state government was earning as revenue is now going to the WB kitty,” he tells NOW!  

It may also be informed that the motor vehicle division of Transport department has revised the rates of annual taxes payable in regard to new vehicles registered henceforth across the state. The rate has been doubled in case of private vehicles and motorcycles where as considering the ultimate impact on common people the department has increased the rates to a minimum of 6% in case of public vehicles and maximum to 44% in respect to goods carrier exceeding 8000kg gross vehicle weight.
The registration fees for new light motor vehicles (private) vehicles costing less than four lakhs is fixed at five percent of the cost of the vehicle [as per invoice]; those costing between Rs. 4 to 10 lakh have to pay 6% of the cost of the vehicles and vehicles costing more than Rs. 10 lakhs 8% of the cost of the vehicle.
In case of light motor vehicles (Government and public sector undertaking) from now, have to pay one percent of the cost of the vehicles as per invoice if the vehicles costs is between Rs.4-10 lakhs and above 10 lakhs has to pay 5% of the cost of the vehicle as per invoice where as those vehicles falling under this category and costing less than Rs.4 lakhs no additional tax is required.
In case of light motor vehicles (Commercial/taxis) have to pay two percent as additional tax for new registration and similar is in the case of goods vehicles (light/medium/ heavy goods) and stage carriage (Buses). But those vehicles like private services(Omni bus registered as non commercial vehicles) from now has to pay 5% as additional tax for new registration and tractors, trailers, cranes, others has to pay 3% as additional tax for new registration of the cost of the vehicle as per invoice.
Speaking to NOW! an official informed that as per instructions of the Government in 2010, a coordination meeting was convened with the Chief Secretary and later with Home and Finance Department where the transport department was informed about the revision of taxes in case of registration fees, fitness fees, road tax for one year and additional taxes for new registration fees where one percent of the cost of the vehicles as pre invoice were to be taxed.
As per the instructions received, the taxes were revised “but special care has been also taken up in respect to public carrier and local taxis which is the basic need of the common people for transportation”. Furthermore, relaxation in case of educational institution buses, ambulance, fire tenders and public utility vehicles is given during the revision of taxes inclusive of imposition of one percent of the cost of the vehicle as per invoice in respect of additional tax for new registration to all the vehicles.
It may be recalled that in a welcome development for the dealers recently, Chief Minister Pawan Chamling announced that the additional tax levied for registration of new vehicles in Sikkim will be reduced. This statement was given by the CM at Rangpo on 10 March 2011 on his return after finalizing the Annual Plan for Sikkim with the Planning Commission at New Delhi.
The proprietor of Nim-Dao and Entel Motors, Guru T. Ladakhi, states in this regard that since the Chief Minister has already given the assurance for the taxes to be brought down, it will come through in the coming days. He shares that the present rate of taxes has also led to a fall of approximately 20 percent of market share in his companies and adds that since no notification regarding the reduction of taxes, as assured, has come through, business for car dealers here in Sikkim has remained glum.
“We have a strong marketing presence and still sales have gone down. We hope that the bureaucratic delay is taken care of and the new notification issued soon so that the state government and the car dealers cum owners from Sikkim benefit”, concluded Mr. Ladakhi.