The Karnataka Motor Vehicle Taxation (Amendment) Act, 2024, has been approved by Governor Thaawarchand Gehlot on March 6, signaling an impending increase in vehicle registration costs in Karnataka. The recent legislation, gazetted on March 7, mandates an additional 3% cess on transport vehicles for the Karnataka Motor Transport and Other Allied Workers Social Security and Welfare Fund.
Furthermore, the amendment grants the state government authority to impose a lifetime tax on electric vehicles (EVs). Electric motor cars, jeeps, omnibuses, and private service vehicles exceeding a cost of Rs 25 lakh will now incur a lifetime tax of 10% of the vehicle’s price at the time of registration. This marks the state’s inaugural imposition of a lifetime tax on electric vehicles. Presently, Karnataka imposes one of the highest road taxes in the nation, ranging from 13% to 20%, with an existing 11% cess, including 10% infrastructure cess and 1% urban transport cess, which will now be compounded by the additional 3% cess on transport vehicles.
Simultaneously, the Karnataka Motor Transport and Other Allied Workers’ Social Security and Welfare Act, 2024, also received approval from Governor Gehlot on March 6. This Act is designed to enhance the well-being of motor transport and other allied workers by providing social security and welfare measures. It extends to workers engaged in various motor transport-related establishments, excluding specific categories such as government employees and managerial personnel.
The Act mandates the formation of the ‘Karnataka State Motor Transport and Other Allied Workers’ Social Security and Welfare Board’, comprising ex-officio members including the Labour Minister and officials from the Department of Labour. The Act delineates various benefits for Motor Transport and Other Allied Workers (MTOAW), encompassing accident benefits, educational assistance, maternity benefits, pension schemes, among others.
Additionally, the Karnataka High Court, on July 27, upheld a single-bench order directing the transport department to include employees of private companies operating in more than four states under the Bharat (BH) series vehicle registration. However, despite the court’s ruling, the transport department is reluctant to encourage BH series registration for private sector employees, citing potential revenue losses ranging from 5-7% per vehicle based on motor vehicle tax categories or prices.
