Times of India, Blore - 25-jul-09, FRONT PAGE
No entry tax on vehicles bought outside the state  TIMES NEWS NETWORK
Bangalore: Good news for vehicleusers. You don’t have to pay entry tax if you buy a motor vehicle outside the state and bring it into the state.
Not just that. If you have already paid the tax within a specified period, you are entitled for refund.
The Karnataka high court on Friday quashed the entry tax of 4% to 12% levied by the state government. The court declared as unconstitutional Section 4 B and 4BB of Karnataka Tax on Entry of Goods into Local Area Act, 1979(amended in 1994) that had provisions for levying entry tax on various types of motor vehicles purchased in other states and brought into Karnataka.
Justice N Kumar, who allowed nearly 150-odd petitions challenging the provision, asked the authorities to refund the tax collected under the said provision within four weeks’ time. The judge also quashed the July 26, 2003 notification which had sought for collection of tax retrospectively for the period Jan. 1, 2000 to March 31, 2002.
“The object of our Constitution makers was free movement and exchange of goods throughout India. It is essential for the economy of India and for sustaining improving living standards of its people. It should ultimately lead to one-country-one-people concept and economic benefit of the development should reach every citizen wherever he lives. The people of the state must sink and swim together. The long-run prosperity and salvation lies in union and not division. Economic unity is the main force for achieving cultural and political unity and stability and progress can be achieved only by demolishing artificial boundaries and barricades and should be sidelined,’’ the judge said.
What you PAID
State was levying 12% entry tax on cars, taxi cabs, scooters, motorcycles and jeeps
8% on earthmovers, dumpers, other-related vehicles
4% on tractors, other agri-related vehicles Entry tax or not, things stay same
Bangalore: The high court’s directive to abolish levy of entry tax charged on vehicles brought outside the state is not going to impact sales of cars here.
For one, with the introduction of uniform VAT, prices of cars across the country are more or less the same or come with marginal differences. This difference in pricing isn’t attributed to any specific state tax, but arises because of transportation charges and 2% CST (central sales tax) levy. CST is an inter-state tax charged on manufactured goods.
Simply put, a Toyota car will bear the cheapest exshowroom price tag in Bangalore as the car is manufactured here. But its ex-showroom price in New Delhi would include transportation cost as well as CST charge.
Similarly, Honda Jazz bears an ex-showroom price of Rs 7.15 lakh in Bangalore as against an Rs 6.95 ex-showroom price tag in New Delhi.
Second, it’s futile to buy a car elsewhere and drive it into Karnataka, for road tax in the state is supposed to be the country’s highest. Road tax on cars below Rs 5 lakh is roughly around 10.8%, and from above Rs 5 lakh it varies between 13.75% and 17.5%. The tax in New Delhi is 4% and in Kerala it’s 6%.
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