New lifetime tax on commercial vehicles draws flak from small operators
Until now, commercial taxis in this price segment were exempt from lifetime tax and instead paid a quarterly tax of ₹100 per seat for a four-seater vehicle — amounting to roughly ₹1,800 annually, including cess. The updated policy replaces this quarterly system with a one-time payment, which many operators say will hit small business owners the hardest.
'This change will impact micro-level operators much more than large fleet owners,' said K. Radhakrishna Holla, president of the Karnataka State Travel Operators' Association. 'For a vehicle costing ₹10 lakh, the lifetime tax now amounts to around ₹50,000 upfront. Most commercial vehicles fall under this category, so it's going to be a major setback for small operators.'
The revised tax slabs go further for vehicles in higher price brackets. Buyers of commercial vehicles priced between ₹10 lakh and ₹15 lakh must now pay 9% of the vehicle's cost as lifetime tax, while those purchasing vehicles above ₹15 lakh will be taxed at 15%. Even electric vehicles, which were previously exempt if they cost more than ₹25 lakh, will now attract a 10% tax under the new structure.
Mr. Holla criticised the move to include electric vehicles in the tax net, saying: 'Karnataka already lags behind in EV adoption. Imposing new taxes on commercial e-vehicles at this stage will discourage drivers from switching to cleaner alternatives.'
Ravi S., a cab driver who owns a single vehicle, expressed his frustration: 'I've been planning to replace my old car this year, but the new rule means I need to pay ₹50,000 extra right away. For drivers like me, that's just not affordable. It's like the government wants to make it harder for small players to survive.'
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