Home ECONOMY Odisha cabinet approves hike in motor vehicles tax

Odisha cabinet approves hike in motor vehicles tax


Odisha Sun Times Bureau
Bhubaneswar, Sep 9:

The Odisha Cabinet today approved the proposal to amend the Orissa Motor Vehicles Taxation Act, 1975 to provide for increased taxation on motor vehicles starting with motor cycle, car, jeep, school bus etc.


While the tax rate for motor vehicles costing between Rs 5 lakh to Rs 10 lakh has been fixed at 8%, for those priced above Rs 10 lakh but below Rs 20 lakh it is 10%,. The new tax would be 12% for vehicles costing between Rs 20 lakh to Rs 40 lakh, 20% for those priced at Rs 40 lakh and beyond. Tax for vehicles costing less than Rs 5 lakh has been kept at 6%.

“The Sanjeev Hota committee had made certain recommendations which the state government had accepted in principle. Based on the committee’s recommendations and after studying taxation rates in vogue in different states, the proposal made by the Commerce & Transport department to amend the Motor Vehicles Taxation Act of 1975 has been approved by the Cabinet which will be sent to the Assembly for adoption,” said GC Pati chief secretary briefing reporters after the Cabinet meeting.

“According to the existing provisions there is one-time tax provision for vehicles having seating capacity of 6+1. The provision is now being introduced for vehicles having seating capacity of up to 12+1, which will include educational buses and maxi cabs etc. Moreover, one-time tax has been introduced for battery-powered vehicles at the rate of 3%. In our state, there was only one tax rate of 5% of cost of the vehicles having seating capacity of up to 6+1. Now we are introducing it for vehicles having seating capacity of up to 12+1 in five slabs. If the cost of the vehicle is less than Rs 5 lakh, the taxation rate will be 6% including all taxes and duties and vehicles costing between Rs 5 lakh to Rs 10 lakh it will be 8%, above Rs 10 to Rs 20 lakh it will be 10%, above Rs 20 lakh to Rs 40 lakh it will be 12% and above Rs 40 lakh it will be 20%,” said Sanjay Rastogi, secretary Commerce & Transport department.

In another important proposal approved at today’s Cabinet meeting, the state government will move the Centre for abolition of Odisha Administrative Tribunal (OAT) . Earlier, state government employees were able to file cases in the tribunal to seek justice in departmental matters. The Cabinet has decided if the need so arises, the state government may increase the number of judges in the High Court to handle these cases after doing away with the OAT.

“The primary objective behind the OAT has failed. Following the honourable Supreme Court’s decision some state governments have abolished administrative tribunals in their states. Keeping these in mind, the state government has taken an in-principle decision to send a proposal in this regard to the Government of India. This cannot take place without the approval of the Government of India. After discussing with the honourable High Court and finalizing the modalities, pending cases will be transferred to the High Court. Approval from competent authorities as required for the purpose will be obtained,” said the chief secretary.

Besides, the Cabinet also approved construction of a second bridge over river Mahanadi that would connect Chahata Ghat in Cuttack city with Nuapatna.

“To connect Chahata ghat of Cuttack with Nuapatna we had floated a tender of Rs 121.85 crore for which the lowest tender value quoted is Rs 142.77 crore. The tender has been awarded to S P Singla Construction. This will be a three- lane bridge of 2.5 km length. The project has been undertaken with assistance from Nabard. The project is scheduled to be completed within 30 months,” said Nalini Kanta Pradhan, secretary, Works department.

The Cabinet approved 11 proposals, including the above three which were the major proposals.