JCCI resents 10% tax on new vehicles, bikes; seeks roll back

JCCI president, Rakesh Gupta addressing press conference in Jammu on Thursday. — Excelsior/Rakesh
JCCI president, Rakesh Gupta addressing press conference in Jammu on Thursday. — Excelsior/Rakesh

Excelsior Correspondent

JAMMU, Aug 22: Describing tax hike of 9% and 10 % on new vehicles and bikes in the Jammu and Kashmir, the Jammu Chamber of Commerce and Industry has demanded immediate roll back on the decision.
Addressing a press conference here today, JCCI president Rakesh Gupta referred to the SRO 492 dated August Ist, 2019 issued by the Transport Department, J&K Govt, regarding exuberant and unjustified hike of taxes levied on motor vehicles and two wheelers in J&K.
JCCI president said that the authorities are not clear on the definition of the cost in the neighbouring states of Himachal and Punjab the rates vary between 3% to 6% as registration fee which is charged on the basic cost without the GST, in J&K it is being levied on the total cost i.e. basic cost + GST.

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Gupta said during a meeting with the Advisor K. Skandan  recently Chamber informed him about the expected decline in sales, infact there is slowdown in the auto sector across India and sales are down by 30%.
The manufacturers of automobiles have started shutting down their plants for 4 to 5 days in a month & have relieved all casual employees. Same is the case with suppliers of auto parts to these manufacturers who have closed down their plants. As per estimates almost 300 automobile dealerships have shutdown across India in the past one year and approx 10,000 people have lost their jobs in the auto sector.
Coming to J&K the incidence of tax would be between Rs. 45000 on a vehicle costing Rs 5 lakhs and Rs 2,92,500 on a vehicle costing Rs 32.5 lacs. “ We wonder if this can be called discrimination as both users would be using the same road.”
Further going through the data of NIC the tax collected by the Transport Department for the financial year 2018-19 was Rs 177 crores which works out to less than 2% of the total turnover of the automobile industry of J&K which is approx. 10,000 cr.
It has been noted with the  incidence of increased RTO Tax, customers have avoided/deferred  the purchases of motor vehicles  across all dealerships in J&K which has resulted in 90% drop in sales in the month of August.
The element of Road Tax (Registration expenses) is not financed by any bank and it would be a direct burden on the customer. The Jammu Chamber requested Governor to review its decision and reduce the tax up less than 4 % , JCCI president said.