Shadow Correspondent
Jammu, Aug, 22
An urgent Press Conference was convened at Chamber House today regarding SRO 492 dated 1st August 2019 issued by the Transport Department, J&K Govt. – regarding exuberant and unjustified hike of taxes levied on motor vehicles & two wheelers in J&K.” Tax shall be levied on Motor Vehicles using any Public road in the state of Jammu & Kashmir at the rates specified against each namely All Motor Vehicles – One time tax @9% of the cost of the vehicle. Motorcycle costing above 1.5 lacs – one time tax @10% of the cost of the vehicle ”
The JCCI President Sh. Rakesh Gupta said that the authorities are not clear on the definition of the cost. In the neighbouring states of Himachal and Punjab the rates vary between 3% to 6% as registration fee which is charged on the basic cost without the GST , in J&K it is being levied on the total cost i.e. Basic cost + GST. During a meeting with the Hon’ble Advisor Mr. K. Skandan recently we informed him about the expected decline in sales , infact there is slowdown in the auto sector across India and sales are down by 30%.
The manufacturers of automobiles have started shutting down their plants for 4 to 5 days in a month & have relieved all casual employees. Same is the case with suppliers of auto parts to these manufacturers who have closed down their plants. As per estimates almost 300 automobile dealerships have shutdown across India in the past one year and approx 10000 people have lost their jobs in the auto sector.
Coming to J&K the incidence of tax would be between Rs. 45000 on a vehicle costing Rs 5 lacs and Rs 2,92,500 on a vehicle costing Rs 32.5 lacs. We wonder if this can be called discrimination as both users would be using the same road.
Further going through the data of NIC the tax collected by the transport department for the financial year 2018-19 was Rs. 177 crores which works out to less than 2% of the total turnover of the automobile industry of J&K which is approx. 10,000 cr.
On the subject of management and administration we need to empathise with the prospective customer. We need to sit in the chair of the customer and think whether he would buy a vehicle with increased taxes which total upto an additional 40% to 60% of the value.
We have noted with the incidence of increased RTO Tax , customers have avoided/deferred the purchases of Motor Vehicles across all dealerships in J&K which has resulted in 90% drop in sales in the month of August.
We would request you to modify the slab on lower rates , as lower sales would also result in lower collection of GST and reduction in revenue to the State.
The element of Road Tax (Registration Expenses) is not financed by any bank and it would be a direct burden on the customer.
Chamber President Sh. Rakesh Gupta said that we are sending an official communication to the Hon’ble Governor and the concerned Advisor with the request to immediately withdraw the said order which we feel is not based on any logic and is bad in law. We shall be urging the Hon’ble Governor kindly to intervene urgently and even if 100% increase in collection of Road tax has to be made, it would be less than 4% of the tax & not 9%.
Also present in the press Conference include Sh. Rajesh Gupta, Sr. Vice President CCI, Sh. Rajeev Gupta, Jr. Vice President CCI, Sh. Manish Gupta, Secretary General CCI, Sh. Gaurav Gupta, Secretary CCI, Sh. Anchal Singh Manhas, President Jammu Province Tourist Taxi Operators Federation, Sh. D.K.Batra, President Automobile Dealers Association, Sh. Pardeep Jain, General Secretary Automobile Dealers Association, Sh. Vikas Rathore, Sh. Sanjay Mahajan, Sh. Anil Puri, Sh. Rohit Gandotra, Sh. Sahil Mahajan, Sh. Sanjay Aggarwal, Sh. Taranjit Singh, Sh. Manik Batra, Sh. Satyam Gupta, Sh. Vikram Puri, Sh. Sanjay Mehra and others.
