Finance minister T M Thomas Isaac has mostly eyed cars, motorbikes and school buses to mop up the additional funds he is so much in need of to fund his welfare and plan schemes.
This looks like a desperate measure for desperate times. At a time when demand for vehicles is falling, it might look as if Isaac has thrown aside economic logic and made owning a car or a motor bike a costlier affair for the common man.
The tax on motorbikes, the common ones not costing above Rs 2 lakh, will be increased by one per cent. Motor cars used mostly by the middle class and the semi-rich, those costing up to Rs 15 lakh, has been upped by two per cent. Isaac expects an additional Rs 200 crore from this measure that could possibly further dampen the consumption urge of the middle class.
On the face of it, Isaac's motor vehicle tax tweaks might seem self-defeating because it could kill demand that Isaac urgently wants to push up. But there could be a larger logic behind his move. Since half the motor vehicle tax goes to nourish Kerala Infrastructure Investment Fund Board, these new tax tampering measures could also prove visionary.
He was perhaps only trying to keep apart more, and thereby making repayment smoother, for KIIFB on which rides nearly 700 infra projects worth Rs 54,000 crore.
Interestingly, Isaac has been kind to the wealthy who prefers four-wheelers that cost over Rs 35 lakh. All this while he was after the likes of Suresh Gopi, Fahadh Faasil and Amala Paul to punish them for registering their luxury cars in Puducherry.
His budget speech but has suddenly raised the white flag. “The condition that these vehicle owners shall pay the tax from the date on which it was registered in other states, is causing hardship for those vehicle owners who intend to change their address to our state. To alleviate this hardship and to avoid further litigation, it will be mandated that they need to pay tax in Kerala only from the date on which the NOC was issued from other states for change of address. All penalties in this regard will be waived. This concession will also be available for vehicles currently under litigation,” he said.
School buses to cost more
Parents take note. Their children's travel in school buses will become costlier. The tax on buses for educational institutions excluding that of government and aided educational institutions will be increased in proportion to the seats, Isaac said.
Quarterly tax at Rs 50 per seat will be levied on buses having up to 20 seats. For buses above 20 seats the tax will levied at Rs 100 per seat per quarter. He expects Rs 6 crore out of this revision.
The tax on education institution buses has been touched for the first time in 23 years.
