Misclassification of private vehicles results in Rs 20L loss

In addition, the authorities also indulged in incorrect issuance of permits to the institutions for the usage of the vehicle since 2015.

According to the Comptroller and Auditor General of India (CAG) report, which was tabled recently, it was revealed that despite several requests, the government was delaying the collection of the remaining amount from schools and colleges in the State.

As per Section 2 (11) of the Motor Vehicles Act, 1988, “educational institution bus” means an omnibus, which is owned by a college, school or other educational institution and is used solely for the purpose of transporting students or staff in connection with any of its activities.

As per the first schedule to Tamil Nadu Motor Vehicles Taxation Act, the rate of tax in respect of vehicles owned by schools is Rs 50 per person per quarter, whereas the tax rate was Rs 100 per person per person in respect of vehicles owned by colleges and other educational institutions.

The Madras High Court had held that the educational institution must own the vehicle and vehicles held in the name of trust cannot be treated as ‘educational institution vehicles’.

On a scrutiny of permit registers, the CAG had observed that in five Regional Transport Offices (RTOs), vehicles owned by trusts and societies were classified as educational institution vehicles, and permits were issued accordingly.

The vehicles were classifiable as “Private Service Vehicles” and attracted tax of Rs 500 per seat per quarter. The incorrect issue of permits and collection of tax at the rates applicable to institution’s vehicles resulted in short realisation of revenue of Rs 20.41 lakh during 2015-18.

When the matter was referred to the State government, the officials accepted the audit observation pertaining to Chennai and stated that Rs 5.74 lakh was collected in respect of only nine vehicles.

RTO authorities further stated that field officers were instructed to collect the difference of tax in respect of the remaining vehicles.