The decision of the State Administrative Council to increase the Road Tax (one time) at the rate of 9 and 10 percent on new motor vehicles and petrol driven motor bikes respectively, has not been felt to be a right decision and has been resented by most of the people, especially those aspiring to buy a new vehicle. The decision has started showing its two edged effect , that of the willing buyers hesitant and deferring purchases and the secondly, dealership facing drop in the sales which again was going to affect the livelihood of many engaged in sale, purchase and ancillary works.
In this connection, Jammu Chamber of Commerce and Industry and other trade bodies have in fact, argued for reviewing of the decision to the extent of even rolling back the hike. While the State Administration has its own view point and demanding circumstances, under which the hike has been decided to be imposed on purchase of new vehicles and has reports that instances have been there for bulk purchase of vehicles from the State to be later sold in other states where comparatively there were better cost advantages.
The JCCI, while putting forth certain necessary data collected, has built up its case that the tax being on a higher side demanded its review and possibly slicing of the rates if not rolling back the entire levy. It would really leave a prospective buyer with the only option of either postponing the purchase or deferring it for a some indefinite time since a vehicle costing Rs. 5 lacs required its new owner to shell out as much as Rs. 45000 more and under hire purchase system of buying the vehicle, the tax part is not treated as included in the cost by banks for sanctioning a loan. Furthermore, the reported argument of the State Administration in wanting to have the parity of such tax with rest of the states and hence the hike, does not cut much ice on ground , and is found not without aberration. We are convinced that the State Government has been found too shy to find avenues other than straining only the middle class incomers and not widening its tax base and by bringing in more avenues to tax in order to increase its revenue but levying a whooping 9 to 10 percent tax is tantamount to killing the goose that was laying a golden egg each day.
There is global economic slowdown and though India’s economy comparatively is found to be stronger and firm on strong parameters , yet India cannot find any immunity from the effects thereof which for instance, speaks for pan-India automobile manufacture, sale and buying,all plunging into tremendous strain. Many manufacturers have either sliced down their operations and laid off thousands of employees which was accentuating the contours of the magnitude of growing unemployment or have shut down their plants. Banks involved in having sanctioned huge work capital credit facilities to this sector cannot experience satisfactory recoveries and the danger of slippage of the health of such asset accounts with them is looming large. Any decision, therefore, taken at the moment which was not on a holistic pattern was going to set in, a vicious circle of capacities remaining idle , job losses, ancillary works like spares and other accessories collapsing and the like. Hence , it would be prudent for the State Administrative Council to review the decision forthwith and slice the tax rate.
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