The imposition of Road Tax on the GST component of vehicle invoice values in J&K is a glaring violation of the Ministry of Road Transport and Highways notification. This policy, which is clearly against the spirit of the Central Government’s directive, places an undue financial burden on the citizens of the Union Territory, and it is high time this unfair practice is brought to an end. In August 2019, Jammu and Kashmir revised its system for levying Road Tax, introducing a one-time tax of 9 percent for motor vehicles and 10 percent for motorcycles costing above Rs 1.5 lakh, calculated on the “aggregate invoice value”-inclusive of GST. This practice continued even after the MoRTH notification explicitly excluded GST from the taxable invoice price for motor vehicles. States and Union Territories like Punjab, Gujarat, and Pondicherry have already aligned their policies to comply with the Central directive, charging Road Tax on the basic cost of the vehicle alone.
The persistence of this flawed policy in J&K has effectively created a “tax on tax” scenario, where citizens are being taxed on the GST they’ve already paid. This is not only financially unjustified but also contradicts the intent of the Central Government to simplify and rationalise tax structures for motor vehicles. The additional financial burden is particularly concerning in a region like J&K, where challenging terrains and underdeveloped infrastructure necessitate personal transportation for accessing essential services, especially in remote and border areas. Industry experts rightly point out that taxing the GST component drives up the cost of ownership and transportation, further escalating the prices of goods and services-a burden ultimately borne by the consumer. The Finance Department must promptly act to rectify this unjust practice and align the region’s tax policy with the MoRTH notification.
Follow our WhatsApp channel
