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ICICI Lombard Expert Blog

More Tax for Petrol and Diesel Vehicle Owners

May 08 2012

The owners of four-wheelers running on petrol and diesel will require shelling out more tax. However, Compressed Natural Gas (CNG) vehicles will enjoy lesser tax amount. As per the regulation set and implemented by the State Government, the Regional Transport Office (RTO) Pune, the change declared will be valid to all private four-wheelers.

The motor vehicle tax is a one-time tax that needs to be paid as soon as the vehicle is bought. This is calculated on basis of the cost purchase of the vehicle. The new tax slab implemented for CNG-run vehicles will be applicable only on those manufactured with compatibility to CNG. For all commercial vehicles, there is no change at all.

For cars that run on petrol costing equal to 10 lakh INR, the tax paid is about nine per cent of the vehicle cost instead of the present 7 per cent. For diesel run vehicles, it will be only 11 per cent, while for CNG vehicles. It will be only five per cent now. For petrol-run vehicles costing 10-20 INR, the tax will be only10 per cent of the overall vehicle cost. For diesel vehicles, it will be only 12 per cent whereas for CNG it will be only 6 per cent.

Petrol-run vehicles owners with cars costing above ` 20 lakh INR will just have to pay 11 per cent of the vehicle cost. For diesel owners, it will be only 13 per cent. The CNG, the tax allocated will be just seven per cent.

Arun Yeola, the regional transport officer, Pune has said that this is for the first time in India that the state government has come up with a decision on tax slabs for vehicles depending on the fuel type used. CNG taxes are usually lower when compared to petrol as well as diesel vehicles understanding the rising of pollution in cities. The basic idea is to promote eco-friendly vehicles. The latest taxes will be applicable from May 1 this year.

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