4 percent hike in life tax on cars

HYDERABAD: Chief minister N Kiran Kumar Reddy is understood to have given clearance to the transport authorities for hiking the life tax on four-wheelers and goods vehicles from 12 percent to 16 percent of the vehicle cost.There will, however, be no increase in the tax in respect of two-wheelers which stands at 9 per cent at present. In all, about 10 lakh vehicles are registered every year across the state.It is estimated that about Rs 80 crore of revenue will accrue to the state's exchequer if the life tax on four-wheelers is raised by 4 percent. The government, which has already imposed 5 percent VAT on vehicles, has decided to increase the life tax basing on proposals sent by the Road Transport Authority.The new life tax and the VAT, together, will raise the cost of a four-wheeler by 21 per cent over the ex-showroom price.