The ongoing practice of levying Road Tax on the GST component of vehicle invoice values in J&K is nothing short of legalised exploitation. Despite a clear directive from the Ministry of Road Transport and Highways in August 2021 explicitly prohibiting such a practice, the UT administration continues to charge 9-10% Road Tax on the aggregate price, including GST. This is not just a technical lapse; it is a deliberate act that has been draining citizens’ pockets since November 2019, when a Finance Department order mandated the inclusion of GST for calculating Road Tax. The Transport Department officially flagged the issue months ago, and the Federation of Automobile Dealers Association wrote to the Finance Department in January 2025, urging correction. Yet, the Finance Department remains mute, signalling systemic indifference if not complicity.
The financial impact is staggering. With higher GST rates on vehicles, this “tax on tax” translates into thousands of extra rupees per buyer, cumulatively amounting to crores of rupees unlawfully collected over the years. Ironically, while Governments aggressively pursue tax evaders with penalties and interest, there is no accountability for this collection by the administration itself. Moreover, the cascading effect of this overcharging is felt far beyond individual car buyers. Commercial vehicle owners pass on the burden to consumers, inflating transport costs and ultimately raising prices of essential goods and services. Such arbitrary taxation runs counter to both economic logic and public interest.
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