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Registrations dip by 15% in Nov after hike in vehicle tax

As per Vahan’s database, TN registered 1.46 lakh vehicles last month compared to 1.75 lakh in October, the highest in 2023

Registrations dip by 15% in Nov after hike in vehicle tax

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CHENNAI: After the steep hike in vehicle registration taxes came into effect last month, the number of vehicle registrations in the State has come down by 15% in November compared to the previous month.

According to the Vahan database, the State registered 1.46 lakh vehicles in November this year compared to 1.73 lakh vehicles in October, which is the highest number of registrations in a month in 2023.

As of November this year, there were 17.13 lakh vehicles registrations at an average of 1.55 lakh/month in TN, as against 15.92 lakh in the corresponding period in 2022. Interestingly, the number of registrations till November 2023 increased by nearly 8% compared to November 2022.

Officials and transportation experts attribute the fall in the registration of new vehicles to the tax hike in November. The State government revised the life tax for all type of vehicles including two-wheelers and cars, road safety tax and green tax.

As per the revised taxes, the rate of life tax for a new motorcycle would be 12%, if the total cost exceeds Rs 1 lakh and 10% if its lesser. Earlier, it was a flat 8% life tax for the new two-wheeler without any cost slab.

For new cars, life tax would be 12% for vehicles priced below Rs 5 lakh, 13% for those priced between Rs 5 lakh and Rs 10 lakh, 18% between Rs 10 lakh and Rs 20 lakh, and 20% for vehicles whose cost exceeds Rs 20 lakh.

A senior official from the transport department said that the life tax on new vehicles was revised after the 2012. “Though there was a fall in the number of registrations due to various reasons, it did not impact revenue collection. The number of vehicle registrations will grow in the coming months,” the official added.

Sumana Narayanan, senior researcher on road safety and sustainable transport, Citizen Consumer and Civic Action Group, pointed out: “Generally, if there is a reduction in the number of new private vehicle registrations, there would be less congestion on the roads. The State government has to take a policy decision on improving public transportation by discouraging people from using private vehicles for their daily commute. It will improve road safety, enable less congestion and pollution.”

G Jagannath
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