Transport department mulls ‘One State, One Tax’ system

With the aim of rationalising quarterly taxes and introducing seamless movement of tourist buses, but without the need for multiple permits, the Transport Department is exploring a One State, One Tax system.

Transport Commissioner K Ilambarithi on Friday chaired a meeting with tourist bus operators to discuss the proposed changes. According to the department, the existing system entails tourist buses being taxed under three separate quarterly tax slabs: single district tax, two district tax, and a State tax.

The move seeks to replace this existing three tier structure with a more uniform State wide tax system. The objective, according to the department, is to simplify the tax regime while ensuring little to no overall tax liability on operators remains.

Speaking to The Hindu, Mr Ilambarithi said that while the single district tax structure entails a quarterly tax of about ₹1,150 per seat, the two district tax stipulates a payment of about ₹1,510 per seat per quarter, while the State tax is ₹3,500 per seat per quarter. A study is under way to explore how this can be simplified.

“The erstwhile districts were large in size, so buses could operate on a one-district permit. They used to take a temporary permit, valid for seven days, to travel to another district. But the districts are now much smaller, and more in number. Similarly, a two-district permit costs about ₹1,510,” he said, adding that operators tend to “overuse” the temporary permit.

While the number of such buses is large, at over 8,000, the revenue derived from them is a mere ₹110 crore. The department is studying models followed in Kerala and Karnataka.

“It [One State, One Tax] is in the preliminary stage. The honourable Minister [Ponnam Prabhakar] had suggested that we study One State, One permit. As part of this, various representatives of associations came forward and we heard them,” he said.

A second aspect of the study will include private buses operating on All India Tourist Permits (AITPs), under which buses are registered in States where taxes are much lower than those prevailing in southern Indian States. At present, the State derives a revenue of only ₹7 crore from such vehicles.

According to Mr Ilambarithi, States such as Andhra Pradesh and Kerala have reduced taxes, and the feasibility of Telangana following suit by lowering the existing AITP tax from ₹4,000 is also being explored. “Our intent is not to charge more from operators but to bring about simplification and rationalisation,” he said.

Touching upon the announcement of a meeting of transport commissioners of different States to discuss AITP and monitoring buses which operate on them, after the tragic bus crash near Kurnool in Andhra Pradesh, Mr Ilambarithi said that the meeting will be convened soon.